On a statement of cash flows for a provider of tutoring services, the cash flows from financing activities would include:
A)the flashcards used to tutor math students
B)the promotional sign at the entrance to the building where the tutoring takes place
C)the money borrowed to purchase the furniture in the tutorial area and the interest owed on that debt
D)the reputation of the tutors working for the service
E)the students who benefit from the service

Question

Quizplus · Accepted Answer

Cash flows from financing activities include transactions involving debt, equity, and dividends. Borrowing money to purchase furniture and the interest owed on that debt are financial activities because they involve the inflow of cash from creditors or the payment of cash to them. Choices A, B, D, and E are not related to financing activities; they pertain to operating activities, capital expenditures, intangible assets, and the effects of the service, respectively.

On a Statement of Cash Flows for a Provider of Tutoring