Question

What are some examples of cash outflows classified as Financing Activities?

A) Purchase of investments

B) Sale of goods or services

C) Issuance of common stock

D) Payment of dividends

Answer 1

Examples of cash outflows classified as Financing Activities include purchasing investments, issuing common stock, and paying dividends.

Step-by-step explanation:

Financing activities involve raising financial capital and making decisions on how to pay for them. Some examples of cash outflows classified as Financing Activities include:

1. Purchase of investments: When a company invests in other businesses or assets
2. Issuance of common stock: When a company sells shares of its stock to investors
3. Payment of dividends: When a company distributes profits to its shareholders