Which of the Following Is Not Classified as a Financing

question 14

Multiple Choice

Which of the following is not classified as a financing activity by IAS 7/AASB 107?

• A) Dividends paid to shareholders
• B) The sale of shares that have been held as an investment
• C) The issue of shares by a company to raise capital
• D) Repayment of borrowings

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Definitions:

Retained Earnings

The portion of a business's profits not distributed to shareholders, instead being reinvested in the business or used to pay off debt.

Net Income

The total amount of profit earned by a company after all expenses and taxes have been deducted from total revenue.

Cash Dividends

Profits distributed by a company to its shareholders out of the company's current or retained earnings, typically in the form of cash.

Preferred Stock

A class of ownership in a corporation with a specified dividend that is paid before any dividends are paid to common stock holders and typically with no voting rights.