Which of the following transactions would be considered a financing activity in preparing a statement of cash flows?
A) Amortizing a discount on bonds payable
B) Recording net income from operations
C) Selling common stock
D) Purchasing inventory

Question

Quizplus · Accepted Answer

Selling common stock would be considered a financing activity, as it involves obtaining funds from investors to finance the business. Amortizing a discount on bonds payable would be considered an operating activity, as it relates to the repayment of debt. Recording net income from operations would also be considered an operating activity, as it represents the profit generated from the company's core business operations. Purchasing inventory would be considered an investing activity, as it involves the acquisition of assets for the purpose of generating future income.

Which of the Following Transactions Would Be Considered a Financing