In the context of a firm's statement of cash flows, ________ activities include the purchase, sale, or investment in fixed assets (e.g., real estate, equipment, and buildings).
A) operating
B) investing
C) capital
D) financing
E) liquidity

Question

Quizplus · Accepted Answer

Investing activities refer to the purchase or sale of long-term assets, such as property, plant, and equipment or investments in other companies. This is separate from operating activities, which involve day-to-day business operations, and financing activities, which relate to raising capital through borrowing or issuing stock. Capital activities are not a recognized category of cash flows in financial reporting. Liquidity is a separate measure of a company's ability to meet short-term obligations.

In the Context of a Firm's Statement of Cash Flows