Which of the following activities is an example of a financing activity?
A) The payment of utility bills
B) The collection of sales revenue
C) The sale of investments
D) The purchase of treasury stock

Question

Which of the following activities is an example of a financing activity?
A) ​The payment of utility bills
B) The collection of sales revenue
C) The sale of investments
D) The purchase of treasury stock

Quizplus · Accepted Answer

The purchase of treasury stock is an example of financing activity as it involves using company's cash to buy back its own shares, reducing the number of outstanding shares in the market and increasing the earnings per share. This transaction affects the equity section of the balance sheet. The payment of utility bills and collection of sales revenue are examples of operating activities, while the sale of investments is an example of investing activity.

Which of the Following Activities Is an Example of a Financing