MC Qu. 28 (LO11-4) Which of the following is... Which of the following is an example of a cash outflow from an investing activity? Multiple Choice Purchase of a building. Purchase of treasury stock. Payment of cash dividends. Payment of interest.
Question
MC Qu. 28 (LO11-4) Which of the following is... Which of the following is an example of a cash outflow from an investing activity?
Multiple Choice
Purchase of a building.
Purchase of treasury stock.
Payment of cash dividends.
Payment of interest.
Solution
The correct answer is "Purchase of a building."
Explanation:
Investing activities in a cash flow statement refer to the changes in a company's investments and long-term assets. These activities include buying and selling property, plant, and equipment, or other long term assets.
So, when a company purchases a building, it is considered a cash outflow from an investing activity because the company is using its cash to invest in a long-term asset (the building).
The other options are not examples of cash outflows from investing activities:
- Purchase of treasury stock is a financing activity, not an investing activity.
- Payment of cash dividends is also a financing activity.
- Payment of interest is an operating activity.
Similar Questions
MC Qu. 29 (LO11-4) Which of the following is an example of a cash... Which of the following is an example of a cash inflow from an investing activity? Multiple Choice Receipt of cash from the sale of equipment. Receipt of cash from the sale of inventory. Receipt of cash from the issuance of common stock. Receipt of cash from the issuance of a note payable.
Which of the following is an example of a cash outflow for a financing activity?Multiple ChoicePayment of cash for suppliesPayment of cash for the purchase of equipmentPayment of cash for treasury stockPayment of cash for interest expense
Which of the following is an example of a cash inflow from an investing activity?Multiple ChoiceReceipt of cash from customersReceipt of cash from the sale of equipmentReceipt of cash from the issuance of common stockReceipt of cash from the issuance of bonds
Item 3Which of the following would be included in cash flows from investing activities?Multiple ChoiceCash collected from customers.Cash received from an issuance of bonds.Cash dividends paid.Cash used to purchase equipment.
Select all that applyWhich of the following items are classified as cash outflows from operating activities on the statement of cash flows?Multiple select question.purchase of supplies on accountissuance of bondspurchase of buildingpayment of an accounts payable balancepayment of salaries
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