Which of the following is an example of a cash outflow from an investing activity?
A)Payment of cash for treasury stock.
B)Payment of cash for the purchase of land.
C)Payment of cash for inventory.
D)Payment on a long-term note payable.

Question

Quizplus · Accepted Answer

Payment of cash for the purchase of land is an example of a cash outflow from an investing activity as it involves the purchase of a long-term asset intended for use in the business. Payment of cash for treasury stock (A) is a cash outflow from a financing activity, payment of cash for inventory (C) is a cash outflow from an operating activity, and payment on a long-term note payable (D) could be either a cash outflow from a financing or an operating activity, depending on the nature of the loan.

Which of the Following Is an Example of a Cash