On the statement of cash flows, which of the following items is classified as an investingactivity?a. Borrowing cash from a bankb. Issuing common stockc. Repaying a loan with cashd. Collecting cash on a long-term loan

On the statement of cash flows, which of the following items is classified as an investingactivity?a. Borrowing cash from a bankb. Issuing common stockc. Repaying a loan with cashd. Collecting cash on a long-term loan

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 1BE

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Question

On the statement of cash flows, which of the following items is classified as an investing
activity?
a. Borrowing cash from a bank
b. Issuing common stock
c. Repaying a loan with cash
d. Collecting cash on a long-term loan

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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