Which item would appear in cash flow from financing activities?

• A. Proceeds from issuing common stock
• B. Purchases of equipment
• C. Interest paid
• D. Taxes paid

Answer: (A)

Financing activities show cash movements from transactions with the company’s owners and creditors—how the company raises and returns capital. Issuing common stock brings in cash from owners to fund operations or growth, so it is classified as a financing activity. Purchasing equipment affects long-term assets and belongs to investing activities. Interest paid and taxes paid are typically considered operating activities because they relate to ongoing business operations (though some frameworks allow different classifications for interest, the standard approach in exams is to group them with operating activities). Hence, proceeds from issuing common stock is the item that would appear in financing activities.