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31.07.2022 - 00:06

Lending money and collecting the loans are a) financing activities b) non-cash investing and financing activities c) operating activities d) investing activities

Question:

Lending money and collecting the loans are

a) financing activities

b) non-cash investing and financing activities

c) operating activities

d) investing activities

Answers (1)

Freida April 10, 2023 в 19:11

The answer is a) financing activities. Lending money and collecting loans involve providing and receiving financial resources to and from external parties. As such, these activities are classified as financing activities in the statement of cash flows, which report changes in the composition and sources of a company's capital structure. Operating activities refer to the primary business operations of a company, such as revenue generation and expenses incurred, while investing activities relate to the acquisition and sale of long-term assets and investments. Non-cash investing and financing activities pertain to transactions that affect the balance sheet but do not involve cash flows, such as issuing stock dividends or exchanging assets with no net monetary impact.

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