When New Fashion Stores,Inc.built 100 new stores,it recorded to outflowing cash in the ________ activities section of its statement of cash flows.

Question

Quizplus · Accepted Answer

Building new stores is an investment activity, which involves the acquisition of long-term assets that are expected to generate future economic benefits. Therefore, the cash outflow related to the construction of the new stores should be recorded in the investing activities section of the statement of cash flows. The financing activities section records cash inflows and outflows related to the company's capital structure, such as issuing or redeeming debt or equity securities. The operating activities section records cash inflows and outflows related to the company's main business activities, such as selling merchandise or providing services. The maintaining and amortizing activities are not recognized as separate sections in the statement of cash flows.