Which of the following would not represent a financing activity?

Question

Quizplus · Accepted Answer

Buying supplies on account represents an operating activity, not a financing activity. Financing activities involve transactions that affect the company's long-term liabilities and equity, such as borrowing or issuing stock. Option A represents a financing activity because paying dividends reduces the company's retained earnings, which is a component of equity. Option B represents a financing activity because an investment of capital by the owners increases equity. Option C represents a financing activity because borrowing money from a bank increases the company's liabilities.

Which of the Following Would Not Represent a Financing Activity