A company borrows $125,000 from the Northern Bank and receives the loan proceeds in cash. This represents a(n):

Question

Quizplus · Accepted Answer

Borrowing money is a financing activity as it involves obtaining funds from external sources to finance the operations or expansion of a business. Operating activities are related to the day-to-day operations of a business such as revenue generation and expenses incurred. Investing activities involve the acquisition or disposition of long-term assets such as property, plant, and equipment. Revenue and expense activities are related to the core operations of a business and are part of operating activities.

A Company Borrows $125,000 from the Northern Bank and Receives