A firm makes investments to obtain productive capacity to carry out its business activities. Investing activities involve acquiring all of the following except:
A)land, buildings, and equipment.
B)patents, licenses, and other contractual rights.
C)common shares or bonds of other firms.
D)long-term notes receivable of other firms.
E)common shares or bonds of the firm.

Question

Quizplus · Accepted Answer

Investing activities include the acquisition of physical assets (like land, buildings, and equipment), intangible assets (such as patents and licenses), and investments in other firms (like common shares or bonds of other firms) or long-term receivables. However, they do not include transactions involving the firm's own equity or debt instruments (common shares or bonds of the firm itself), which are considered financing activities.

A Firm Makes Investments to Obtain Productive Capacity to Carry