Which of the following describes the financing activities section of the statement of cash flows?

Which of the following describes the financing activities section of the statement of cash​ flows?

A.

It reports on activities that create revenue or expenses for the​ entity's business.

B.

It includes interest and dividend income and cash payments for interest expense.

C.

It includes cash inflows and outflows involved in​ long-term liabilities and equity.

D.

It includes increases and decreases in​ long-term assets

Answer

Answer: Option C

It includes cash inflows and outflows involved in​ long-term liabilities and equity.

Explanation:

The financing activity in the cash flow statement focuses on how a firm raises capital and pays it back to the investors through the capital markets. It includes payment of cash dividend , issuing or selling of stock, taking long term loans etc.

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