Answer (D) is correct . Financing activities include obtaining resources from owners and providing them with a return on, and a return of, their investment. Cash inflows from financing activities include proceeds from issuing equity instruments. Cash outflows include outlays to reacquire the enterprise’s equity instruments, and outlays to pay dividends. However, an income tax refund is an operating activity.
Answer (A) is incorrect because Issuance of common stock is classified as a financing activity.
Answer (B) is incorrect because Purchase of treasury stock is classified as a financing activity.
Answer (C) is incorrect because Payment of dividends is classified as a financing activity.
|
