Which of the following sections from the statement of cash flows includes loans to others and collections on loans?
A) Loans to others and collections of loans are included in the financing section.
B) Loans to others and collections of loans are included in the investing section.
C) Loans to others and collections of loans are included in the operating section.
D) Loans to others and collections of loans are not included in any of the above-mentioned sections.

Question

Quizplus · Accepted Answer

Loans to others and collections on those loans are considered investing activities because they involve the outlay and subsequent inflow of cash for the purpose of generating future income and cash flows. This is why they are included in the investing section of the statement of cash flows.

Which of the Following Sections from the Statement of Cash