When auditing the statement of cash flows of a profitable,growing company which combination is most likely?
$\begin{array}{cc}
\text {Cash flows from operations }&\text{Cash flows from investing}\end{array}$
A-$\begin{array}{cc}
\quad\quad\quad\text { Positive } &\quad\quad\quad\quad\quad\quad \text { Positive } \\end{array}$
B-$\begin{array}{cc}\quad\quad\quad\text { Positive } &\quad\quad\quad\quad\quad\quad \text { Negative } \\end{array}$
C-$\begin{array}{cc}\quad\quad\quad\text { Negative } &\quad\quad\quad\quad\quad\quad \text { Positive } \\end{array}$
D-$\begin{array}{cc}\quad\quad\quad\text { Negative } &\quad\quad\quad\quad\quad\quad \text { Negative }
\end{array}$
A)Option A
B)Option B
C)Option C
D)Option D

Question

When auditing the statement of cash flows of a profitable,growing company which combination is most likely? 
$\begin{array}{cc}
\text {Cash flows from operations }&\text{Cash flows from investing}\end{array}$
A-$\begin{array}{cc}
\quad\quad\quad\text { Positive } &\quad\quad\quad\quad\quad\quad \text { Positive } \\end{array}$
B-$\begin{array}{cc}\quad\quad\quad\text { Positive } &\quad\quad\quad\quad\quad\quad \text { Negative } \\end{array}$
C-$\begin{array}{cc}\quad\quad\quad\text { Negative } &\quad\quad\quad\quad\quad\quad \text { Positive } \\end{array}$
D-$\begin{array}{cc}\quad\quad\quad\text { Negative } &\quad\quad\quad\quad\quad\quad \text { Negative }
\end{array}$
A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

A profitable, growing company would likely have positive cash flows from operating activities, which would be reflected in the statement of cash flows as increases in cash flow from operating activities. Additionally, such a company may also be investing in its growth through capital expenditures, which would result in cash outflows from investing activities. Option B shows increased cash flows from operating activities and cash outflows from investing activities, which would be consistent with a profitable, growing company. Options A, C, and D show either decreases or minimal changes in cash flows from operating activities or investing activities, which would be less likely for a growing company.

When Auditing the Statement of Cash Flows of a Profitable,growing Cash flows from operations Cash flows from investing\begin{array}{cc}\text {Cash flows from operations }&\text{Cash flows from investing}\end{array}Cash flows from operations ​Cash flows from investing​

When Auditing the Statement of Cash Flows of a Profitable,growing $\begin{array}{cc}\text {Cash flows from operations }&\text{Cash flows from investing}\end{array}$