A List of Sources and Uses of Cash Are Given

question 67

Multiple Choice

A list of sources and uses of cash are given below. Select on the line provided whether each is an operating, investing, or financing activity.
-borrowing through a note payable

• A)operating
• B)investing
• C)financing activity.

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Definitions:

Nominal Rate

The interest rate stated on a financial product or agreement without adjustment for inflation or other factors that affect the real value of returns.

Stated Value

Stated value refers to an arbitrary value assigned to the no-par value stock by the board of directors of a company, used for accounting purposes.

Effective Yield

The total yield on an investment, taking into account all compounding periods, fees, and other factors affecting the actual return.

Stated Rate

The interest rate declared on a financial instrument, such as a bond or loan, not taking into account compounding or fees.