The purchase of equipment is an example of financing activity. True False and explain
The purchase of equipment is an example of financing activity.
True False and explain
Homework Answers
False.
Explanation:
The Purchase of Equipment is an example of Investing Activity.
Investing Activity refers to investments made during the period by purchase of assets (long term), investments in shares, bonds and various types of investments in other companies. While, financing activities refer to financial transactions such as transaction in stock and bonds of the company concerned. It also includes dividend payments to stockholders.
Hence, the purchase of equipment is an example of investing activity and not that of Financing Activity.
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The purchase of equipment is an
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