CFA Practice Question

CFA Practice Question

All of the following would be considered financing activities except for ______.
A. current portion of long-term debt
B. notes payable to a bank AND dividends payable
C. loans receivable (e.g., from officers)
Explanation: Investing activities include lending funds and collecting the principal on these loans.

User Contributed Comments 8

User Comment
llgoms financing = borrowing money. loans receivable = lending money
danlan Lending funds, collecting principal are related to buying securities from other companies, those securities are considered as long term asset, so those are investing activities.

Borrowing by equity and debt, paying principal of equity and debt, and paying equity dividend are financing activities.

Collecting interest, dividend, and paying interest are considered operational.
dealsoutlook good summary danlan
copus thanks for the summary...that is very helpful (I have confess that Accounting is fast becoming my least favorite CFA module!)
Kathkun Thank you danlan, that was useful =)
Insipidity Excellent concise summary, danlan!
jjhigdon In hindsight, I see why C is Investing, but I was tempted to chose B based on the fact that dividends paid can be classified as CFO under IFRS....
ashish100 Danlan is the man! or woman!
You need to log in first to add your comment.