Towson Corporation acquired 1,000,000 shares of its own common stock for $10,000,000 during Year 2.The statement of cash flows classifies the transaction as a(n)
A)exchange transaction.
B)investing activity.
C)financing activity.
D)operating activity.
E)equity activity.

Question

Quizplus · Accepted Answer

The acquisition of its own shares by Towson Corporation is classified as a financing activity on the statement of cash flows because it relates to transactions with the company's owners and affects the equity structure of the company.

Towson Corporation Acquired 1,000,000 Shares of Its Own Common Stock