Transactions of a company involving external sources of funding are referred to as:
A)Investing activities.
B)Financing activities.
C)External activities.
D)Operating activities.

Question

Quizplus · Accepted Answer

Transactions involving external sources of funding, such as issuing debt or equity, repaying loans or dividends to shareholders, are considered financing activities. Investing activities refer to transactions related to the acquisition or disposal of long-term assets, while operating activities are related to the day-to-day operations of the company. External activities is not a commonly used term in accounting or finance.

Transactions of a Company Involving External Sources of Funding Are