Question

In cash flow statements, the purchase of new equipment and sale of investment can be found...

In cash flow statements, the purchase of new equipment and sale of investment can be found under

A.Operating activities

B.Investing activities

C.Growing activities

D.Financing activities

In cash flow statements, the change in inventories and the change in payables can be found under

A. Financing Activities

B.Investing Activities

C.Operating Activities

D.Growing Activities

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Answer #1

1). Purchase of new assets are generally considered for long-term investment so they are noted under cash flow from investing activities. Sale of investment are also recorded under cash flow from investing activities.

So Option B is correct.

2). Inventories are part of Operating assets and similarly payable are parts of operating liabilities, so both of them are recorded under cash flow from operating activities.

So, Option C is correct

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