What is the effect of the sale of $5,000 worth of cash equivalents at cost in the statement of cash flows prepared under the direct method?
A) Add $5,000 in the reconciliation
B) $5,000 investing cash inflow
C) $5,000 operating cash inflow
D) No disclosure

Question

Quizplus · Accepted Answer

Cash equivalents are considered part of cash and cash equivalents on the statement of cash flows, so their sale at cost does not affect cash flow and requires no separate disclosure.

What Is the Effect of the Sale of $5,000 Worth