The following item would be classified as a financing activity on the statement of cash flows:
A)Payments for inventory.
B)Payment of dividends.
C)Acquisition of land.
D)Sales of goods.

Question

Quizplus · Accepted Answer

Payment of dividends is a financing activity because it involves distributing profits to the shareholders of a company, which is an action that affects the company's financing and capital structure. Payments for inventory (A) and sales of goods (D) are operating activities, and acquisition of land (C) is an investing activity.

The Following Item Would Be Classified as a Financing Activity