In the preparation of a statement of cash flows all of the following would be classified as investing activities except:
A) collection of a loan from a subsidiary.
B) purchase of a patent from an inventor.
C) sale of plant assets.
D) dividends received on stock held as an investment.

Question

Quizplus · Accepted Answer

The collection of a loan from a subsidiary, purchase of a patent, and sale of plant assets are all examples of investing activities as they involve the acquisition or disposal of long-term assets. Dividends received on stock held as an investment are classified as operating activities, as they are considered to be a return on the investment rather than an acquisition or disposal of a long-term asset.

In the Preparation of a Statement of Cash Flows All