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Cash flows from investing activities include all of the following except:Multiple ChoiceCash proceeds from selling investments.Cash proceeds from collections on loans.Cash advanced to borrowers.Cash proceeds from borrowing.

Question

Cash flows from investing activities include all of the following except:Multiple ChoiceCash proceeds from selling investments.Cash proceeds from collections on loans.Cash advanced to borrowers.Cash proceeds from borrowing.

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Solution

The correct answer is: Cash proceeds from borrowing.

Here's why:

  1. Cash proceeds from selling investments: This is considered an investing activity because it involves the conversion of an investment into cash.

  2. Cash proceeds from collections on loans: This is also an investing activity because it involves the collection of cash from a previous investment (the loan).

  3. Cash advanced to borrowers: This is an investing activity because it involves the use of cash to create a new investment (the loan).

  4. Cash proceeds from borrowing: This is not an investing activity. Instead, it is a financing activity because it involves the generation of cash through the incurrence of a liability (the loan).

This problem has been solved

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Which of the following would be included in cash flows from financing activities?Multiple ChoiceCash proceeds from sales.Cash received from a sale of land.Cash dividends paid.Cash used for purchases of equipment.

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