Which of the following is a cash outflow from a financing activity?
A)A purchase inventory
B)A purchase of treasury stock
C)A payment to buy property
D)A loan made to a third party

Question

Quizplus · Accepted Answer

A purchase of treasury stock is a cash outflow from a financing activity as it involves the company buying back its own shares from the market, which reduces the amount of equity in the business. Purchasing inventory (A) is a cash outflow from operating activities as it is related to the day-to-day operations of the business. A payment to buy property (C) is a cash outflow from investing activities as it involves the purchase of a long-term asset. A loan made to a third party (D) is a cash outflow from financing activities, but it does not involve the company's own cash, as it is providing financing to someone else.

Which of the Following Is a Cash Outflow from a Financing