Which of the following items is classified as a 'financing activity' in the statement of cash flows?
A) cash received from accounts receivable.
B) cash payment to purchase debentures of another entity.
C) cash payment on redemption of the company's debentures.
D) payment of dividends through a dividend reinvestment scheme.

Question

Quizplus · Accepted Answer

Cash payment on redemption of the company's debentures is classified as a financing activity because it involves the company's management of its own long-term liabilities and equity, which are central to financing activities.

Which of the Following Items Is Classified as a 'Financing