On the statement of cash flows, which of the following items will affect both financing activities and operating activities?
A) Issuance of equity securities.
B) Collection of loans to other entities.
C) Payment of dividends.
D) Redemption of debt.

Question

Quizplus · Accepted Answer

The redemption of debt will affect both financing activities and operating activities. It will be reported as a cash outflow in the financing activities section because it is a repayment of debt. However, it will also affect the operating activities section because the repayment of debt decreases the cash paid for interest, which is an operating activity. Option A, the issuance of equity securities, is a financing activity only. Option B, the collection of loans to other entities, is an operating activity only. Option C, payment of dividends, is a financing activity only.

On the Statement of Cash Flows, Which of the Following