Which of the following would be reported as a cash outflow from investing activities?
A)Donating an old piece of equipment to charity.
B)Repaying the principal of a bond.
C)Buying another company's bonds with cash.
D)Paying for an investment asset by issuing company stock.

Question

Quizplus · Accepted Answer

Buying another company's bonds with cash would be reported as a cash outflow from investing activities, as it involves using cash to acquire an investment asset.

Alternatively, option D could also be considered since issuing company stock to pay for an investment asset involves a reduction in cash as well, although it would be classified as a financing activity rather than an investing activity.

Options A and B would not be reported as cash outflows from investing activities. Donating an old piece of equipment to charity does not involve the use of cash, and repaying the principal of a bond represents a reduction in the company's liabilities rather than an investment activity.

Which of the Following Would Be Reported as a Cash