Cash flows arising from the acquisitions and divestitures of other companies are cash flows from
A)investing activities.
B)operating activities.
C)financing activities.
D)research activities.

Question

Quizplus · Accepted Answer

Cash flows arising from the acquisitions and divestitures of other companies are classified as investing activities under the indirect method of preparing the statement of cash flows. This is because the cash flows are related to the purchase or sale of long-term assets, such as subsidiaries, associated companies, or joint ventures, which represent investments of the company.

Cash Flows Arising from the Acquisitions and Divestitures of Other