What is an investing activity quizlet? (2024)

What is an investing activity quizlet?

Investing activities include the purchase or sale of long-lived assets used in operating the business, or the purchase or sale of investment securities. What are financing activities? The primary types of financing activities are borrowing money, issuing shares of stock, and paying dividends.

In accounting, investing activities refers to the purchase and sale of long-term assets and other business investments within a specific reporting period. Investing activities are, in fact, one of the main categories of cash activities that your business would be reporting on its cash flow statement.

The purchase of another company's stock is an example of an investing activity. Cash flows from financing activities include the payment of interest on a note payable.

Investment. The act of redirecting resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit.

Answer and Explanation:

The correct option is (a) Purchase of equipment. Investing activities are related to procurement and sale of fixed assets and long-term investment. Hence the purchase of equipment is an investing activity.

Investing activities involve the purchase and sale of long-term fixed assets, long-term investments, accepting notes receivable, lending loans, and few other investments other than in cash and cash equivalents.

If a company borrows money, this is a financing activity. There are some inflows from financing activities including borrowing money or selling common stock. Outflows from financing activities include paying the principal part of debt (a loan payment), buying back your own stock or paying a dividend to investors.

Investing activities include the purchase and sale of property, plant, and equipment. Operating activities include selling goods, performing services, and purchasing inventory. (a) Income statement. (b) Balance sheet.

Cash inflows (proceeds) from investing activities include:

Cash receipts from collections of loans (except for program loans) and sales of other agencies' debt instruments. Cash receipts from sales of equity instruments and returns from investments in those instruments.

an investor's collection of investment assets.

What does investing mean in economics?

Investing involves the purchase of assets with the intent of holding them for the long term, while speculation involves attempting to capitalize on market inefficiencies for short-term profit.

What Is Investment? By investment, economists mean the production of goods that will be used to produce other goods. This definition differs from the popular usage, wherein decisions to purchase stocks (see stock market) or bonds are thought of as investment. Investment is usually the result of forgoing consumption.

What do you mean by Investment? Investment definition is an asset acquired or invested in to build wealth and save money from the hard earned income or appreciation. Investment meaning is primarily to obtain an additional source of income or gain profit from the investment over a specific period of time.

Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets.

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Stocks, real estate, and precious metals are all ownership investments. The buyer hopes that they will increase in value over time. Lending money is an investment. Bonds and even savings accounts are loans that earn interest over time for the investor.

The purchase or sale of a fixed asset like property, plant, or equipment would be an investing activity.

Answer and Explanation: The correct answer is A. Issuance of common stock. The issuance of common stock is a financing activity, not an investing activity.

Issuance of common stock is a financing activity because it involves raising capital to fund the business. In issuing common stocks, the management sells a portion of the company ownership to the public.

Where are investing activities?

Investing activities are one of the main categories of net cash activities that businesses report on the cash flow statement. Investing activities in accounting refers to the purchase and sale of long-term assets and other business investments, within a specific reporting period.

The six different types of business activities are operations and logistics, sales and marketing, general administration, customer service, budgeting and forecasting, and accounting and auditing. Each of these activities is necessary for a business to operate effectively.

Cash inflows (proceeds) from investing activities include: Receipts from collections of loans (except program loans) and sales of other entities' debt instruments (other than cash equivalents) Receipts from sales of equity instruments and from returns of investment in those instruments.

These activities can be found on a company's financial statements and in particular the income statement and cash flow statement. Operating activities are distinguished from investing or financing activities, which are functions of a company not directly related to the provision of goods and services.

Investing cash flows arise from a company investing in or disposing of long-term assets. Financing cash flows arise from a company raising funds through debt or equity and repaying debt.