When a Company Purchases a Security It Considers a Cash

question 128

Multiple Choice

When a company purchases a security it considers a cash equivalent, the cash outflow is:

• A) Reported as an operating activity.
• B) Reported as an investing activity.
• C) Reported as a financing activity.
• D) Not reported on a statement of cash flows.

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Definitions:

Oral Declaration

A statement or announcement made verbally and not in written form, which can be legally binding under certain conditions.

Real Property Title

Legal ownership and right to the use of land and the permanent structures attached to it.

Tax Sale

A public sale of property conducted by a government authority to recover unpaid taxes owed by the property's owner.

Purchase

The act of buying goods or services, typically involving a monetary transaction.