Which one of the following statements is true?
A)The two primary sources of financing available to corporations are borrowed funds and funds invested by owners.
B)Financing activities involve the acquisition of property,plant and equipment.
C)Borrowed funds are a more permanent source of financing than funds invested by owners.
D)Investing activities involve the selling of products or services and the incurring of expenses related to selling these products and services.

Question

Quizplus · Accepted Answer

The statement in option A is true. Financing for corporations can come from either borrowed funds or funds invested by owners, with these two sources being the primary sources of financing. Option B is incorrect because acquiring property, plant and equipment is part of investing activities, not financing activities. Option C is incorrect because borrowed funds are typically a more temporary source of financing compared to funds invested by owners. Option D is incorrect because selling products or services and incurring expenses related to these activities are part of operating activities, not investing or financing activities.

Which One of the Following Statements Is True