A company has surplus cash available and decides to purchase a 270-day treasury bill.The correct classification of the purchase on the cash flow statement would be:
A)as an increase in cash equivalents.
B)as a cash outflow in operating activities.
C)as a cash outflow in investing activities.
D)as a cash outflow in financing activities.

Question

Quizplus · Accepted Answer

Purchasing a treasury bill is considered an investment activity, so it is classified as a cash outflow in investing activities on the cash flow statement.

A Company Has Surplus Cash Available and Decides to Purchase