Question

Which of the following is reported as a financing activity in the statement of cash flow?...

Which of the following is reported as a financing activity in the statement of cash flow?

a) the sale of securities classified as available for sale

b) the acquisition of stock for the purpose of retiring it

c) the payment of interest on bonds payable

d) the receipt of dividend revenue

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Answer #1

'The aquisition of stock for the purpose of retiring it' is repoted as 'Financing activities in the statement of cash flows.

Allcash inflows and outflows related to stock, bonds notes payable are treated as financing activities in the statement of cash flows.

The sale of securities classified as available for sale ---- It is a cash inflow from investing activites.

The payment of interest on bonds payable ---- It is a cash outflow from operating activities.

The receipt of dividend revenue ---- It is cash inflow from operating activities.

Correct option is (b)

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