Which statement describes investing activities?

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Prepare for the WGU ACCT2350 Intro to Business Accounting Exam. Practice with multiple choice questions and detailed solutions to sharpen your accounting skills. Master your exam with confidence!

Multiple Choice

Which statement describes investing activities?

Explanation:
Investing activities focus on acquiring or disposing of long-term assets like property, plant, and equipment. Buying or selling property, plant, and equipment changes the company’s long-term asset base, which is the essence of investing activities. Borrowing funds and issuing common stock are financing activities, while paying salaries is an operating activity. So the statement that describes investing activities is purchasing and selling property, plant, and equipment.

Investing activities focus on acquiring or disposing of long-term assets like property, plant, and equipment. Buying or selling property, plant, and equipment changes the company’s long-term asset base, which is the essence of investing activities. Borrowing funds and issuing common stock are financing activities, while paying salaries is an operating activity. So the statement that describes investing activities is purchasing and selling property, plant, and equipment.

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