Which of the following would be classified as financing cash flows on a cash flow statement? 1. Paying cash dividends.
2) Lending cash to others.
3) Issuing stock for cash.
4) Purchasing long-term assets for cash.

Question

Quizplus · Accepted Answer

Payment of dividends reduces the company's retained earnings, which is a financing activity. Issuing stock for cash is also a financing activity as it increases the company's equity. Lending cash to others falls under investing activities as it involves providing loans to other parties. Purchasing long-term assets for cash is a part of investing activities as well since it involves the acquisition of long-term assets for the company's use.

Which of the Following Would Be Classified as Financing Cash