Final answer:
The sale of a building is classified as an investing inflow because it involves the conversion of long-term assets into cash, and it is recorded as an inflow in the investing section of the cash flow statement. The right answer to the question 'How would the sale of a building be classified?' is (c) Investing inflow.
Explanation:
When considering the classification of the sale of a building on financial statements, we refer to the sections included in the cash flow statement of a business, which are operating activities, investing activities, and financing activities. The sale of a fixed asset, such as a building, would typically be classified as an investing inflow. This is because investing activities include transactions involving the acquisition and disposal of long-term assets and other investments not included in cash equivalents.
When a company sells a building, it is converting a long-term asset into cash or cash equivalents. Therefore, this transaction is considered a source of cash, which is why it is recorded as an inflow in the investing section. This reflects the company's disposal of an investment it had made in its long-term assets.