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Transactions with its long term creditors to borrow money or to repay the principal amounts of...

Transactions with its long term creditors to borrow money or to repay the principal amounts of loans are called: a. Investing activities. b. Indirect activities c. Direct activities d. Operating activities. e. Financing activitie

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Answer #1

The transactions with its long term creditors to borrow money or to repay the principal amounts of loan are called financing activities. Because financing activities refer to the flow of cash between a business and its owners or creditors. It focuses on how the business raises capital and pays back. So borrowing money from either long term or short term creditors or repaying to them are called financing activities.

Hence, option E is the correct answer.

SUMMARY:

Option E is the correct answer.

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