BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Buying assets required to operate a business is an example of:
A
Operating activity
B
Investing activity
C
Marketing activity
D
Financing activity
Explanation: 

Detailed explanation-1: -No. Financing activities include cash raised from issuing debt or stock and cash used to repay debt r pay dividends. This is the correct option. All cash flows involving long-term assets are investing activity cash flows.

Detailed explanation-2: -Investing activities include purchases of long-term assets (such as property, plant, and equipment), acquisitions of other businesses, and investments in marketable securities (stocks and bonds).

Detailed explanation-3: -Investing activities refer to earnings or expenditures on long-term assets, such as equipment and facilities, while financing activities are the cash flows between a company and its owners and creditors from activities such as issuing bonds, retiring bonds, selling stock or buying back stock.

Detailed explanation-4: -What Are Investing Business Activities? Investing business activities are those that are capitalized over more than one year and usually appear as the second section of the cash flow statement. The purchase of long-term assets is recorded as a use of cash in this section.

Detailed explanation-5: -The purchase or sale of a fixed asset like property, plant, or equipment would be an investing activity.

There is 1 question to complete.