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.

Question

Clare

Business

28 June, 19:28

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.

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Answers (1)

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Roxie · Answer 1

Option B, Cash effects of transactions obtaining resources from owners and providing them with a return on their investment.

Explanation:

Option "A" is incorrect because loans are transacted and collected depending on the nature of the activity.

Option "C" is wrong because investment activity covers procurement and disposal of investment and property and equipment.

Option "D" is wrong since transfers of cash to net income would be subject to operations

The financial transactions in the cash flow statement depends on how a company receives money and returns the capital market back to creditors. These activities include the payment of cash dividends, the addition or change of loans, or the issuance and sale of more stocks.