Practice Question

1. Sally wants to invest in your company. She looks at the financing activities section of the cash flow statement and asks you the significance of this section. What would you tell her?

The financing activities section explains the business's funding and any obligations paid that relate to long-term liabilities and issued stock, which can produce substantial cost.
The financing activities section explains decreases in accounts receivable and equipment sale losses.
The financing activities section presents information about inventory costs and changes related to accounting principles.