Which of the following would be considered a financing activity and a source of cash on the statement of cash flows?
A)Purchase of treasury stock
B)Sale of land
C)Borrowing on a long-term debt
D)Payment from customers

Question

Quizplus · Accepted Answer

Borrowing on a long-term debt is a financing activity as it involves obtaining cash from external sources of financing.

Answer: A 
 Purchase of treasury stock is also a financing activity as it involves using cash to repurchase outstanding shares from the open market, thereby decreasing the number of outstanding shares.

Note: Selling land and receiving payments from customers are considered investing and operating activities, respectively, on the statement of cash flows.

Which of the Following Would Be Considered a Financing Activity