Which of the following statements is incorrect regarding the investing activities section of the statement of cash flows?
A) Investing activities deal with long-term liabilities (debt) and equity accounts.
B) Increases in long-term asset balances suggest cash outflows to purchase assets.
C) Decreases in long-term asset balances suggest cash inflows from selling assets.
D) Investing activities involve cash purchases and cash disposals of long-term assets.

Question

Quizplus · Accepted Answer

Investing activities do not deal with long-term liabilities (debt) and equity accounts. They are included in the financing activities section of the statement of cash flows. Investing activities deal with the purchase and sale of long-term assets, such as property, plant, and equipment, as well as investments in other companies.

Which of the Following Statements Is Incorrect Regarding the Investing