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Business Studies

Investment Decision

why sale of f...

Question

why sale of fixed asset is not oprating activities

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Solution

Sale and Purchase of Fixed Assets is an investment because it needs cash for a long period, therefore , it is considered as Long-Term Investment of the company. Hence, sale and purchase of fixed assets is not taken into Cash Flow from Operating Activities instead it is considered in Cash Flow from Investing Activities.

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Sale of fixed assets is ___ while calculating cash flow from investing activities.

Q. Cash received from sale of goods is not an operating activity.

Q. Classify the Following Activities into cash Flows under (A) Operating (B) Investing (C) Financing:
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