Which of the following is a cash flow from an investing activity?
A) Payment for advertising
B) Cash receipt from a customer for a previous credit sale
C) Cash received from sale of equipment
D) Payment of dividends

Question

Quizplus · Accepted Answer

Cash received from sale of equipment is a cash flow from an investing activity as it involves the purchase or sale of long-term assets such as property, plant, and equipment.

A, B, and D are not cash flows from investing activities. Option A is a cash flow from an operating activity as it pertains to the daily operations of the business. Option B is also a cash flow from operating activity as it pertains to the receipt of cash from a customer that already owes the business money. Option D is a cash flow from financing activity as it pertains to the distribution of profits to the shareholders.

Which of the Following Is a Cash Flow from an Investing