Upon review of a statement of cash flows,the following was noted: $\begin{array}{llcc}
\text {Cadn flers from agereting artivities}& \$ 30,000\
\text {Cash flows from invertine activities}& 80,000 \
\text {Cast flows from finanding activities}& (130,000)\
\end{array}$
From this information,it is likely that the company is
A)using cash from operations and selling long-term assets to pay back debt
B)using cash from operations and borrowing to purchase long-term assets.
C)using its profits to expand growth.
D)using cash from investors to provide for operations.

Question

Upon review of a statement of cash flows,the following was noted:  $\begin{array}{llcc}
\text {Cadn flers from agereting artivities}&  \$ 30,000\
 \text {Cash flows from invertine activities}& 80,000 \
 \text {Cast flows from finanding activities}& (130,000)\
\end{array}$
 From this information,it is likely that the company is
A)using cash from operations and selling long-term assets to pay back debt
B)using cash from operations and borrowing to purchase long-term assets.
C)using its profits to expand growth.
D)using cash from investors to provide for operations.

Quizplus · Accepted Answer

The cash flows from operating activities are positive, indicating that the company is generating cash from its regular business operations. The cash flows from investing activities are negative, suggesting that the company is selling long-term assets to generate cash. The cash flows from financing activities are negative, indicating that the company is using cash to pay back debt. Therefore, choice A is the best answer as it suggests that the company is using cash from operations and selling long-term assets to pay back debt.

Upon Review of a Statement of Cash Flows,the Following Was