Investing activities are the acquisition or disposal of long-term assets. This can include the purchase of a company vehicle, the sale of a building, or the purchase of marketable securities. Because these items involve the long-term use of cash, they are reported in the investing section of the cash flow statement.
What are some examples of investing activities on the cash flow statement?
Items reported on a cash flow statement for investing activities include purchases of long-term assets such as property, plant and equipment (PP&E), investments in marketable securities such as stocks and bonds, as well as acquisitions of other businesses.
Which of the following appears in the investing activities section of the statement of cash flows?
Which of the following appears in the investing activities section of the statement of cash flows? Explanation: Purchasing land (a long-lived asset) for cash is an investing activity. Issuing common stock and paying dividends are both financing activities.
What is an example of an investing activity?
Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets. However, negative cash flow from investing activities might be due to significant amounts of cash being invested in the long-term health of the company, such as research and development.
Is interest received an investing activity?
Both interest received and dividends received can be classified as operating or investing activities. U.S. GAAP allow to classify them as operating activities only. Under IFRS, interest paid and dividend paid are classified either as an operating or as a financing activity.
Which of the following is reported in the statement of cash flows?
The statement of cash flows reports cash inflows as positive amounts and the cash outflows as negative amounts. They are reported in one of the three sections of the statement of cash flows: operating activities, investing activities, and financing activities.
