Final answer:
The purchase of treasury stock classifies as a financing activity in the cashflow statement.
Step-by-step explanation:
The purchase of treasury stock classifies as a financing activity in the cashflow statement.
Financing activities are activities that involve obtaining or repaying funds to or from investors or lenders. The purchase of treasury stock is considered a financing activity because it involves a company buying back its own shares from the open market, which affects the company's equity position and cash balance.
For example, if a company repurchases its treasury stock using cash, it would result in a decrease in the company's cash balance and a reduction in the company's total equity.