If a company has both an inflow and an outflow of cash related to property, plant, and equipment,
A) the two cash effects can be netted and presented as one item in the investing activities section of the statement of cash flows.
B) the cash inflow and the cash outflow should be reported separately in the investing activities section of the statement of cash flows.
C) the two cash effects can be netted and presented as one item in the financing activities section of the statement of cash flows.
D) the cash inflow and the cash outflow should be reported in the financing activities section of the statement of cash flows.

Question

Quizplus · Accepted Answer

The cash inflow and the cash outflow related to property, plant, and equipment should be reported separately in the investing activities section of the statement of cash flows. Netting them together could obscure important information about the types and amounts of cash flows a company is generating from investing activities.

If a Company Has Both an Inflow and an Outflow