Which of the following items is included in the financing activities section of

Question

Which of the following items is included in the financing activities section of the statement of cash flows? A. Cash effects of transactions involving making and collecting loans. B. Cash effects of transactions obtaining resources from owners and providing them with a return on their investment. C. Cash effects of acquiring and disposing of investments and property, plant, and equipment. D. Cash effects of transactions that enter into the determination of net income. Which of the following items is included in the financing activities section of the statement of cash flows? A. Cash effects of transactions involving making and collecting loans. B. Cash effects of transactions obtaining resources from owners and providing them with a return on their investment. C. Cash effects of acquiring and disposing of investments and property, plant, and equipment. D. Cash effects of transactions that enter into the determination of net income.

Explanation / Answer

Which of the following items is included in the financing activities section of the statement of cash flows Answer is "B" - Cash effects of transactions obtaining resources from owners and providing them with a return on their investment Option A is incorrect because transctions making and collecting of loans are operating Activity depending on nature of business Activity Option " C" is incorrect because Aquiring and Disposal of investments and property and Equipment is Covered under investing Activity Option " D" is incorrect because transctions of cash that enter into determining net income would come under operating Activity Only Option "B" is Correct because transactions obtaining resources from owners and providing them with a return on their investment refers to issuing Stocks and paying Dividends both are covered under Financing activities section

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