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3 Cards in this Set
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Transactions involving external sources of funding. are transactions involving external sources of funding. There are two basic sources of this external funding—the owners of the company who invest their own funds in the business, and creditors who lend money to the company. With this financing, the company engages in investing activities
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FINANCING ACTIVITIES
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include the purchase and sale of (1) long-term resources such as land, buildings, equipment, and machinery and (2) any resources not directly related to a company's normal operations. Once these investments are in place, the company has the resources needed to run the business and can perform operating activities.
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INVESTING ACTIVITIES
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include transactions that relate to the primary operations of the company, such as providing products and services to customers and the associated costs of doing so, like utilities, taxes, advertising, wages, rent, and maintenance.
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OPERATING ACTIVITIES
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