When using the indirect method, which balance sheet accounts are most affected by investing activities?
A) Current assets and current liabilities
B) Long-term assets
C) Long-term liabilities
D) Stockholders' equity

Question

Quizplus · Accepted Answer

Investing activities typically involve the purchase or sale of long-term assets, such as property, plant, and equipment or investments in other companies. Therefore, the balance sheet account most affected by investing activities is long-term assets. Current assets and liabilities, long-term liabilities, and stockholders' equity are typically affected more by operating and financing activities.

When Using the Indirect Method, Which Balance Sheet Accounts Are