On the Consolidated Statement of Cash Flows, the Parent's Acquisition

question 19

Multiple Choice

On the consolidated statement of cash flows, the parent's acquisition of additional shares of the subsidiary's stock directly from the subsidiary is reported as:

• A) an investing activity.
• B) a financing activity.
• C) an operating activity.
• D) none of these.

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Definitions:

Pie

A metaphorical representation of a total market or economy, which can be divided among participants.

Comparative Advantage

Comparative advantage is an economic principle that describes the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors.

Opportunity Cost

Opportunity cost refers to the value of the next best alternative that is foregone when choosing one option over another.

Ice Cream

A frozen dessert made from dairy products, sweeteners, and flavorings, enjoyed as a treat or snack.