Investing activities include:
A)purchases of merchandise for cash.
B)increase in accounts receivable.
C)purchases of prepaid expense items such as supplies and insurance for cash.
D)purchases of plant and equipment for cash.

Question

Quizplus · Accepted Answer

Purchases of plant and equipment for cash are considered investing activities. This involves long-term investments that are expected to generate income or benefit the company over multiple accounting periods. Purchases of merchandise for cash and prepaid expenses are considered operating activities, while an increase in accounts receivable is part of the company's normal operations and not a separate investing activity.

Investing Activities Include