Of the Following, Which Is NOT a Cash Outflow from an Investing

question 113

Multiple Choice

Of the following, which is NOT a cash outflow from an investing activity?

• A) Purchase of long-term investments, such as the stock of another company
• B) Loans made to another party
• C) Purchase of treasury stock
• D) Purchase of land

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Definitions:

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

Direct Method

A way of reporting cash flows from operating activities by showing major classes of gross cash receipts and payments.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct material and labor costs.