Financing activities involve:

a. acquiring and disposing of productive long-lived assets.

b. long-term liability and owners' equity items.

c. lending money to other entities and collecting on those loans.

d. cash receipts from sales of goods and services.

Question

Business

Kendall Wheeler

17 August, 07:21

Financing activities involve:

a. acquiring and disposing of productive long-lived assets.

b. long-term liability and owners' equity items.

c. lending money to other entities and collecting on those loans.

d. cash receipts from sales of goods and services.

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Answers (1)

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Bailey · Answer 1

Option B. Long-term liability and owners' equity items.

Explanation:

The reason is that financing activities involves the borrowings and raising funds either for financing its growing business working capital or for the investment in one or more than one projects which will generate value for the company. Furthermore, the financing activity also includes the paying off the debts, interest payments and dividend payments.

Acquiring & disposal of assets and income earned by lending other companies are investments and falls under the investing activities.

The cash generated by the sale of products and services are the cash generated from the operating activities as it is the core operation of the company.

So the only option which is correct is option B.

Financing activities involve:a. acquiring and disposing of productive long-lived assets.b. long-term liability and owners' equity items.c. lending money to other entities and collecting on those loans.d. cash receipts from sales of goods and services.

Financing activities involve:

a. acquiring and disposing of productive long-lived assets.

b. long-term liability and owners' equity items.

c. lending money to other entities and collecting on those loans.

d. cash receipts from sales of goods and services.