The purchase of held-to-maturity securities would be reported on a statement of cash flows as:
A)financing activities.
B)investing activities.
C)operating activities.
D)none of the above. Held-to-maturity securities would not be reported on a statement of cash flows.

Question

Quizplus · Accepted Answer

The purchase of held-to-maturity securities is classified as an investing activity on the statement of cash flows because it involves the purchase of long-term investments. Operating activities involve the core business operations of a company, while financing activities involve transactions related to borrowing and issuing equity. Held-to-maturity securities are not excluded from the statement of cash flows, so option D is incorrect.

The Purchase of Held-To-Maturity Securities Would Be Reported on a Statement