Which of the following would be classified as investing cash flows on a statement of cash flows?
1.Acquiring a building by signing a long-term mortgage payable.
2.Lending cash to others.
3.Issuing stock for cash.
4.Purchasing long-term assets for cash.
5.Selling stock investments for cash.

A) 1,4,5.
B) 1,2,4.
C) 1,3,5.
D) 2,4,5.

Question

Brendan Girton · Accepted Answer

Final Answer : D, Explanation :  Investing cash flows include transactions involving the purchase and sale of long-term assets and investments. Therefore, lending cash to others (2), purchasing long-term assets for cash (4), and selling stock investments for cash (5) are classified as investing activities. Acquiring a building by signing a mortgage (1) is a financing activity, and issuing stock for cash (3) is also a financing activity, not investing.

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