Question

A company borrows $125,000 from the Northern Bank and receives the loan proceeds in cash. This represents a(n):

Answer 1

Answer:

A company obtains $\ 125,000$ from the Northern Bank and takes the loan proceeds in cash. This represents a(n) Financing activity.

Explanation:

Financing activity:

• Financing activities show the progress of cash between a business furthermore its owners and creditors.
• Financing activities concentrate on how the business develops capital and rewards spine its investors.
• The activities include issuing and selling stock, returning cash dividends, and combining loans.
• Borrowing and compensating short-term loans, Borrowing and repaying long-term loans, and separate long-term liabilities.

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