The sale of a long-term investment would appear on a cash flow statement as a:
A) cash outflow in the investing activities section
B) cash inflow in the investing activities section
C) cash inflow in the operating activities section
D) cash inflow in the financing activities section

Question

Quizplus · Accepted Answer

The sale of a long-term investment would generate cash inflow and would be categorized as a cash inflow in the investing activities section of the cash flow statement. This section shows the cash flow from buying or selling long-term assets, such as property, plant, and equipment or long-term investments. A cash outflow would be recorded if the company had purchased a long-term investment. The operating activities section shows cash flows related to the day-to-day operations of the business, while the financing activities section records cash flows related to the company's financing activities, such as issuing or repaying debt or equity.

The Sale of a Long-Term Investment Would Appear on a Cash