Which of the Following Events Would Be Classified as an Investing

question 21

Multiple Choice

Which of the following events would be classified as an investing activity on a statement of cash flows?

• A) payment of interest on a loan
• B) receipt of cash dividends on an available-for-sale investment
• C) issuance of common stock
• D) sale of an office building at a gain

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Definitions:

Collections

The process of pursuing payments of debts owed by individuals or businesses, typically involving accounts receivable.

Accounts Receivable

The money owed to a company by its customers for goods or services delivered but not yet paid for.

Credit Sales

Sales made by a business where payment is deferred, allowing the customer to pay at a later date.

Raw Materials

the unprocessed or minimally processed resources used to manufacture finished goods, such as metals, plastics, or textiles.