Which of the following would be considered an investing activity and a source of cash?
A)Purchase of equipment
B)Sale of Dillard's stock held as an investment
C)Issuance of corporate stock
D)Receipt of interest on savings account

Question

Quizplus · Accepted Answer

Sale of Dillard's stock held as an investment is considered an investing activity because it involves the sale of an asset that was held for investment purposes. It is also a source of cash because the sale results in cash inflow. The other options are not considered investing activities - A is a purchase of equipment which is a capital expenditure, C is an issuance of corporate stock which is a financing activity, and D is receipt of interest which is an operating activity.

Which of the Following Would Be Considered an Investing Activity