Cash flows from financing activities include all but one of the following: Cash payments on the...

Cash flows from financing activities include all but one of the following:

Cash payments on the principal of long-term debt.

Cash proceeds from a bank loan.

Buying and selling bonds or stock of other firms.

Cash purchases of treasury stock.

Solutions

Expert Solution

Cash flows from financing activities includes all receipts and payments which affect the finances of an organization and are done through certain instruments like stocks, bonds, treasury stocks, dividends and the like

Cash payments on the principal of long-term debt – Long term debt is a source of finance for an organization and cash payments related to these are categorized under cash flows from financing activities

Cash proceeds from a bank loan – Bank loans are a source of finance for an organization and so cash proceeds from them are categorized under cash flows from financing activities

Buying and selling bonds or stock of other firms – These are a form of investments and buying and selling them is categorized under cash flows from Investing Activities and not Financing activities

Cash purchases of treasury stock – Purchase of treasury stock results in decrease in stockholder’s equity and thereby affecting the finances of an organization. So, these are categorized under Financing Activities

So, as per above discussion, option C is the correct option

jeff jeffy answered 1 year ago

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