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:

Common Stock

A form of corporate equity ownership, a type of security representing ownership of a fraction of a corporation's capital.

Industry Segment Disclosure

Financial reporting that breaks down a company's operations by segment or division to provide insight into each segment's performance.

U.S. GAAP

The Generally Accepted Accounting Principles in the United States, which set the standards for financial reporting and accounting.

Seventy-Five Percent

A quantitative measure or threshold, often referenced in various contexts to signify a substantial majority of 75%.