The following item is classified as a 'financing activity' in the Statement of Cash Flows:
A) interest paid on debentures;
B) cash received from trade receivables;
C) cash payment on redemption of the company's debentures;
D) cash payment to purchase debentures of another entity.

Question

Quizplus · Accepted Answer

Cash payment on redemption of the company's debentures is classified as a financing activity because it involves the company managing its own capital structure, specifically paying off its own debt securities.

The Following Item Is Classified as a 'Financing Activity' in the Statement