Question: Is purchasing supplies an investing activity?

What is considered an investing activity?

Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets. Negative cash flow is often indicative of a company’s poor performance.

Is purchasing stock a financing activity?

When a company sells its own stock, the sale is considered a financing activity. The difference is that a company purchases another company’s stock with the hopes that it will increase in value, while a company sells its own stock to generate income meant to finance the purchase of assets.

Which of the following is an example of an investment activity?

Purchase of machinery is an example of Cash outflow for investing activity. & Issuance of shares are cash flows relating to financing activities. Prepayment of a contract is a cash flow relating to Operating activity. In the light of above discussion, the correct option is Purchase of machinery.

What are examples of financing activities?

What Are Some Examples of Financing Activities?

  • Issuing bonds (positive cash flow)
  • Sale of treasury stock (positive cash flow)
  • Loan from a financial institution (positive cash flow)
  • Repayment of existing loans (negative cash flow)
  • Cash from new stock issued (positive cash flow)

What are investing and financing activities?

Investing activities refer to earnings or expenditures on long-term assets, such as equipment and facilities, while financing activities are the cash flows between a company and its owners and creditors from activities such as issuing bonds, retiring bonds, selling stock or buying back stock.

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Which of the following activities is not a financing activity?

Paying interest on a long-term note payable is not reported as a financing activity in the statement of cash flows.