Which of the following is a cash flow resulting from a financing activity?
A)Purchasing an automobile by borrowing money from the bank
B)Receiving a cash dividend on an investment in another company
C)Declaring a dividend on common stock
D)Issuing 1,000 shares of preferred stock

Question

Quizplus · Accepted Answer

Issuing 1,000 shares of preferred stock is a financing activity as it involves raising capital by issuing new shares of stock. The other options are not financing activities - A is an investing activity, B is an operating activity, and C is also an operating activity (specifically, a financing expense).

Which of the Following Is a Cash Flow Resulting from a Financing