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.
Solution
The correct answer is: Cash proceeds from borrowing.
Here's why:
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Cash proceeds from selling investments: This is considered an investing activity because it involves the conversion of an investment into cash.
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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).
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Cash advanced to borrowers: This is an investing activity because it involves the use of cash to create a new investment (the loan).
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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).
Similar Questions
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