Which of the following transactions would not be classified as a financing activity?
A) Purchase of treasury shares
B) Payment of dividends
C) Issuance of bonds at a discount
D) Purchase of a long-term investment in bonds

Question

Quizplus · Accepted Answer

Purchasing a long-term investment in bonds would fall under investing activities, not financing activities. Choice A, purchase of treasury shares, is a financing activity because it involves a company buying back its own shares. Choice B, payment of dividends, is also a financing activity because it involves distributing profits to shareholders. Choice C, issuance of bonds at a discount, is a financing activity because it involves raising funds by issuing debt.

Which of the Following Transactions Would Not Be Classified as a Financing