Which item would be classified as financing activities?

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Multiple Choice

Which item would be classified as financing activities?

Explanation:
Financing activities involve transactions with owners and creditors that affect equity or long-term liabilities. Issuing stock brings cash from owners and increases equity, so it belongs to financing activities. Purchasing land uses cash to acquire a long-term asset, which is investing activities. Paying salaries is part of daily operations and thus an operating activity. Receiving cash interest on a bond is typically classified as an operating activity (interest income), not financing.

Financing activities involve transactions with owners and creditors that affect equity or long-term liabilities. Issuing stock brings cash from owners and increases equity, so it belongs to financing activities. Purchasing land uses cash to acquire a long-term asset, which is investing activities. Paying salaries is part of daily operations and thus an operating activity. Receiving cash interest on a bond is typically classified as an operating activity (interest income), not financing.

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