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Question
Which of the following transactions is not shown under Financing Activity?
Options
Dividend Paid
Repayment of Bank Loan
Subscribed Shares of Other Company
Proceeds from Issue of Shares
MCQ
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Solution
Subscribed Shares of Other Company
Explanation:
Financing activities focus on transactions that change the size and composition of a company’s own capital and borrowings. While issuing shares, paying dividends, and repaying bank loans all directly impact the company’s internal capital structure, buying or subscribing to shares of another company is considered an deployment of funds into an external asset. Because this transaction involves purchasing a financial asset to earn returns, it is classified under Investing Activities rather than financing activities.
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