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Purchase of shares or debentures are concerned with________
- a)Investing Activities
- b)Financing Activities
- c)Operating Activities
- d)Both Operating Activities and Financing Activities
Correct answer is 'A'. Can you explain this answer?
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Verified Answer
Purchase of shares or debentures are concerned with________a)Investing...
Investing activities are the second main category of net cash activities listed on the statement of cash flows and consist of buying and selling long-term assets and other investments. In other words, this is the net amount of cash received and paid during an accounting period for long-term assets and investments. You can think of these activities like the money a company uses to invest in itself or the money it makes from its investments.
Items that may be included in the investing activities line item include the following:
1. Purchase of fixed assets (negative cash flow)
2. Sale of fixed assets (positive cash flow)
3. Purchase of investment instruments, such as stocks and bonds (negative cash flow)
4. Sale of investment instruments, such as stocks and bonds (positive cash flow)
5. Lending of money (negative cash flow)
6. Collection of loans (positive cash flow)
7. Proceeds of insurance settlements related to damaged fixed assets (positive cash flow)
Most Upvoted Answer
Purchase of shares or debentures are concerned with________a)Investing...
Investing Activities
Investing activities are those activities that involve the acquisition or disposal of long-term assets or investments in other entities. The purchase of shares or debentures is considered an investing activity because it involves the acquisition of an ownership interest in another entity.
Shares
Shares represent a portion of ownership in a company. When an individual purchases shares of a company, they become a shareholder and are entitled to a portion of the company's profits in the form of dividends. Shares can be purchased on the open market or through a private placement.
Debentures
Debentures are a form of long-term debt issued by a company. They are essentially a loan from the investor to the company, with the investor receiving interest payments in exchange for their investment. Debentures can be purchased on the open market or through a private placement.
Investing Activities on the Statement of Cash Flows
The purchase of shares or debentures would be reported on the statement of cash flows under the section for investing activities. This section reports the cash inflows and outflows related to the acquisition or disposal of long-term assets or investments in other entities.
Conclusion
In conclusion, the purchase of shares or debentures is considered an investing activity because it involves the acquisition of an ownership interest in another entity. This activity would be reported on the statement of cash flows under the section for investing activities.
Investing activities are those activities that involve the acquisition or disposal of long-term assets or investments in other entities. The purchase of shares or debentures is considered an investing activity because it involves the acquisition of an ownership interest in another entity.
Shares
Shares represent a portion of ownership in a company. When an individual purchases shares of a company, they become a shareholder and are entitled to a portion of the company's profits in the form of dividends. Shares can be purchased on the open market or through a private placement.
Debentures
Debentures are a form of long-term debt issued by a company. They are essentially a loan from the investor to the company, with the investor receiving interest payments in exchange for their investment. Debentures can be purchased on the open market or through a private placement.
Investing Activities on the Statement of Cash Flows
The purchase of shares or debentures would be reported on the statement of cash flows under the section for investing activities. This section reports the cash inflows and outflows related to the acquisition or disposal of long-term assets or investments in other entities.
Conclusion
In conclusion, the purchase of shares or debentures is considered an investing activity because it involves the acquisition of an ownership interest in another entity. This activity would be reported on the statement of cash flows under the section for investing activities.
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Purchase of shares or debentures are concerned with________a)Investing...
Purchase and sale of share and debenture is an investing activity becz the company is investing the amount in the securities of the company...
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Purchase of shares or debentures are concerned with________a)Investing Activitiesb)Financing Activitiesc)Operating Activitiesd)Both Operating Activities and Financing ActivitiesCorrect answer is 'A'. Can you explain this answer?
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