Each of the following transactions would be classified as either an investing or a financing activity except
A) investments in stock are purchased.
B) a bank loan is obtained.
C) stock is issued to acquire land.
D) dividends are paid.

Question

Quizplus · Accepted Answer

The transaction described in C is a mix of both investing and financing activities. Issuing stock is a financing activity, while using it to acquire land is an investing activity. Therefore, this transaction cannot be classified as either purely investing or financing activity. The other transactions can be easily classified as either investing (A) or financing (B and D) activities.

Each of the Following Transactions Would Be Classified as Either