Which of the following transactions are related to Financing Activities?

a. Share issued for cash.

b. Dividend distributed to shareholders.

c. Sale of machinery.

d. Redemption of debentures.

e. Provision for depreciation.

Choose the correct answer from the options given below:

The correct answer is a, b and d only.

Key Points The correct answer is:

a. Share issued for cash.
b. Dividend distributed to shareholders.
d. Redemption of debentures.

Financing activities are those activities that involve raising capital or repaying capital to the providers of finance. They typically involve transactions related to equity and debt financing. Let's analyze each option:

a. Share issued for cash: This transaction represents the issuance of shares in exchange for cash. It is a financing activity because it involves raising capital from shareholders.

b. Dividend distributed to shareholders: This transaction represents the distribution of profits to shareholders in the form of dividends. While it does not directly involve raising or repaying capital, it is considered a financing activity as it relates to the return of funds to the providers of finance.

c. Sale of machinery: This transaction represents the sale of an asset, which is not directly related to financing activities. It falls under the category of investing activities as it involves the sale of a long-term asset.

d. Redemption of debentures: This transaction represents the repayment of debentures, which are long-term debt instruments. It is a financing activity as it involves the repayment of borrowed capital.

e. Provision for depreciation: This transaction does not directly relate to financing activities. It falls under the category of operating activities as it represents the recognition of an expense associated with the wear and tear of assets over time.

In summary, options a, b, and d are related to financing activities, while options c and e are not.