Which of the following is reported as a financing activity in the statement of cash flows? Multiple Choice The payment of interest on bonds payable. The receipt of dividend revenue. The acquisition of stock for the purpose of retiring it. The sale of securities classified as available for sale.

Question

Business

Martha Duarte

31 May, 03:35

Which of the following is reported as a financing activity in the statement of cash flows? Multiple Choice The payment of interest on bonds payable. The receipt of dividend revenue. The acquisition of stock for the purpose of retiring it. The sale of securities classified as available for sale.

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Answers (1)

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Carlos Dougherty · Answer 1

The correct answer is A

Explanation:

Financing activities are those activities which involve the cash payments as well as cash receipts, that relate to the external financing of the business and also involve the obtaining of resources from the owners and repay resources to creditors.

The example of financing activities are repayment as well as borrowing of money, issuance of the securities and payment of dividends.

So, from the above options, the one which is reported as the financing activities in the cash flows statement involve is the payment of interest on the bonds payable.