Asked by Louie Allard on Jul 03, 2024
Verified
Which of the following would cause a decrease in cash from investing activities?
A) Purchasing shares of stock of another company.
B) Paying a cash dividend to stockholders.
C) Issuing additional shares of the company's common stock.
D) Using cash to purchase supplies.
Investing Activities
One of the components of cash flow statements that shows the cash spent on and generated from various investment-related activities in a specific period.
- Understand the sorting of cash transactions in the statement of cash flows and their effect on a firm's liquidity.
- Differentiate between cash flows from investing and financing activities and their importance in analyzing financial statements.
Verified Answer
SK
sofiya KotarskiJul 06, 2024
Final Answer :
A
Explanation :
Purchasing shares of stock of another company is considered an investing activity, and using cash for this purpose would result in a decrease in cash from investing activities.
Learning Objectives
- Understand the sorting of cash transactions in the statement of cash flows and their effect on a firm's liquidity.
- Differentiate between cash flows from investing and financing activities and their importance in analyzing financial statements.