Which of the following statements regarding cash flows from investing activities is true?
A)The proceeds from sales of investments are reported as cash inflows from investing activities.
B)Cash flows from investing activities are calculated by making adjustments to net income.
C)Cash paid to acquire long-lived assets is reported as a cash inflow from investing activities.
D)Cash received from issuing a long-term payable is reported as a cash inflow from investing activities.

Question

Quizplus · Accepted Answer

The proceeds from sales of investments are a cash inflow from investing activities, as they represent a return on an investment. Cash flows from investing activities include the purchase and sale of long-term assets, investments, and property, plant, and equipment. They are not calculated by making adjustments to net income, as net income only reflects income and expenses from operations, and not from investing activities. Cash paid to acquire long-lived assets is a cash outflow from investing activities, as it represents an investment in the company's future operations. Cash received from issuing a long-term payable would be reported as a cash inflow from financing activities, as it represents a form of financing for the company.

Which of the Following Statements Regarding Cash Flows from Investing