Which of the following is reported as an investing activity in the statement of cash flows?
A)Sale of a subsidiary.
B)Issuance of a long-term promissory note.
C)Sale of treasury stock.
D)Purchase of highly liquid,short-term investments with excess cash.

Question

Quizplus · Accepted Answer

Sale of a subsidiary is reported as an investing activity as it involves the sale of a long-term asset.

Answer: D 
 Purchase of highly liquid, short-term investments with excess cash is reported as an investing activity as it involves the acquisition of an investment asset.

B and C are not reported as investing activities. Issuance of a long-term promissory note is reported as a financing activity, and sale of treasury stock is reported as a financing or operating activity depending on the reason for the sale.

Which of the Following Is Reported as an Investing Activity