An inflow of cash received by a company when it sold new common stock to investors is best classified as which type of cash flow?
A) Operating
B) Investing
C) Financing
D) Not a cash flow

Question

Quizplus · Accepted Answer

An inflow of cash received by a company when it sold new common stock to investors is a financing cash flow because it represents a source of funds from external parties to the company's financing activities. Operating cash flows arise from the company's core operations, such as sales and collections from customers, while investing cash flows relate to the purchase or sale of long-term assets such as equipment or investments. This transaction is not considered a non-cash transaction and therefore is not classified as "not a cash flow."

An Inflow of Cash Received by a Company When It