Which of the following transactions would not be classified as a financing activity?
A) Purchase of treasury stock
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 be classified as an investing activity, not a financing activity. The other options are all financing activities: purchasing treasury stock reduces equity, paying dividends to shareholders is a distribution of profits to owners, and issuing bonds at a discount increases liabilities from financing activities.

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