Which of the Following Would Be Reported as a Financing

question 77

Multiple Choice

Which of the following would be reported as a financing activity on the statement of cash flows?

• A) Dividends collected from an investment in marketable securities.
• B) Note payable issued to purchase equipment.
• C) Purchase of investment securities.
• D) Cash paid for the purchase of treasury stock.

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Definitions:

Cost of Goods Available

Cost of Goods Available represents the total cost of merchandise available for sale during a certain period, including the beginning inventory plus net purchases.

Operating Expense

Costs associated with the normal day-to-day operations of a business, such as rent, utilities, and salaries, but excluding costs related to production.

Merchandising Company

A business entity that purchases finished goods and sells them at a profit, without altering their form.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales by calculating the percentage of revenue that exceeds the cost of goods sold.