Cash flows from issuing and repurchasing stock or issuing and repaying (retiring)debt are classified as
A)operating activities.
B)investing activities.
C)financing activities.
D)borrowing activities.

Question

Quizplus · Accepted Answer

Issuing and repurchasing stock or issuing and repaying (retiring) debt are considered financing activities because they involve changes in the company's long-term liabilities and equity. These activities are not related to the day-to-day operations of the business, which are classified as operating activities. Investing activities involve the purchase and sale of long-term assets such as property, plant, and equipment and do not include issuing or repurchasing stock or issuing and repaying debt. Borrowing activities involve obtaining loans or lines of credit from financial institutions or other lenders, which also fall under financing activities.

Cash Flows from Issuing and Repurchasing Stock or Issuing and Repaying