How should the transactions involving marketable securities be classified in Korman's statement of cash flows for 2009?
A) The purchase of marketable securities, sales of marketable securities, and receipt of dividends are all classified as investing activities.
B) The purchase and the sale of marketable securities are classified as investing activities; the receipt of dividends is classified as an operating activity.
C) The purchase of marketable securities is classified as an investing activity; the sale of marketable securities is classified as a financing activity; the receipt of dividends is classified as an operating activity.
D) The purchase and the sale of marketable securities are classified as investing activities; the receipt of dividends is classified as a financing activity.

Question

Quizplus · Accepted Answer

The purchase and sale of marketable securities are classified as investing activities because they involve the acquisition and disposal of investment assets. The receipt of dividends is classified as an operating activity because it represents income earned from the company's ordinary operations.

How Should the Transactions Involving Marketable Securities Be Classified in Korman's