In the context of a firm's statement of cash flows, ________ include cash raised during the period by borrowing money or selling stock an/or cash used during the period by paying dividends, buying back outstanding stock, or buying back outstanding bonds.
A) investing activities
B) financing activities
C) operating activities
D) liquidity activities
E) capital activities

Question

Quizplus · Accepted Answer

Financing activities involve cash flows related to the firm's capital structure, such as issuing or repurchasing stocks or bonds, borrowing or repaying loans, and paying dividends. Investing activities involve cash flows related to the firm's investments in long-term assets, while operating activities involve cash flows from the firm's day-to-day operations. Liquidity activities and capital activities are not commonly used terms in accounting, and are not relevant options in this context.

In the Context of a Firm's Statement of Cash Flows