Payment for the acquisition of inventories is shown on the statement of cash flows as
A)an operating activity.
B)an investing activity.
C)a financing activity.
D)either an operating activity or a financing activity.

Question

Quizplus · Accepted Answer

Payment for the acquisition of inventories is part of the operating activities section of the statement of cash flows because it relates to cash flows from the company's primary revenue-generating activities. It is not considered an investing activity, as it does not involve the purchase or sale of long-term assets, or a financing activity, as it does not involve the issuance or repayment of debt or equity.

Payment for the Acquisition of Inventories Is Shown on the Statement