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Question
According to accounting profession, which of the following would be considered as a cash inflow from an "investing" activity ____________.
According to accounting profession, which of the following would be considered as a cash inflow from an "investing" activity ____________.
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Solution
The correct option is C Cash flow from machinery purchased
Investing activities involve cash flows from investments made or sold and the interest and dividend earned on such investments where operations of the business are non-financial activities. Amount used for purchase of asset will be considered as a cash outflow for investing in the asset. Therefore, interest and dividend earned will be income from investing activities and purchase of machinery will be outflow of cash.
Investing activities involve cash flows from investments made or sold and the interest and dividend earned on such investments where operations of the business are non-financial activities. Amount used for purchase of asset will be considered as a cash outflow for investing in the asset. Therefore, interest and dividend earned will be income from investing activities and purchase of machinery will be outflow of cash.
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