Which of the Following Statements Regarding Cash Flows from Investing

question 38

Multiple Choice

Which of the following statements regarding cash flows from investing activities is true?

• A)The proceeds from sales of investments are reported as cash inflows from investing activities.
• B)Cash flows from investing activities are calculated by making adjustments to net income.
• C)Cash paid to acquire long-lived assets is reported as a cash inflow from investing activities.
• D)Cash received from issuing a long-term payable is reported as a cash inflow from investing activities.

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Definitions:

Operating Lease

is a rental agreement allowing a lessee to use an asset temporarily without ownership, typically with terms significantly shorter than the asset's life.

Operating Cash Flows

The cash generated from the normal operating activities of a business, reflecting its ability to generate positive cash flow to maintain and grow its operations.

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting in the United States.

Operating Activities

Operating activities relate to the primary revenue-generating activities of a business, influencing its net income and cash flows from operations.