The adjustment for changes in operating working capital accounts depends in part on a firm's rate of growth.Some firms use short- or long-term borrowing or equity financing, which is
A)classified as operating activities.
B)classified as financing activities.
C)classified as investing activities.
D)disclosed in a supplementary schedule or notes to the financial statements.
E)disclose such changes in managements' discussion and analysis.

Question

Quizplus · Accepted Answer

Short- or long-term borrowing or equity financing is classified as financing activities as it involves obtaining funds for the company's activities and affects the company's financial structure. The adjustment for changes in operating working capital accounts is also classified as operating activities. Both activities are separately disclosed in the statement of cash flows.

The Adjustment for Changes in Operating Working Capital Accounts Depends