Final answer:
True, The purchase of store equipment for cash is correctly classified as a cash outflow in the Investing Activities section of the statement of cash flows, as it represents an investment made by the business in its operational capacity.
Step-by-step explanation:
The statement that the purchase of store equipment for cash would be listed as a cash outflow in the Investing Activities section on a statement of cash flows is true. The Investing Activities section includes transactions related to the acquisition or disposal of long-term assets such as property, plant, and equipment, which are essential for reinvesting in the business to foster growth.
When a company purchases equipment, it is indeed making an investment in its operating capacity, which has the potential to expand its product output and thus increase sales and cash flow in the future. However, it is key to monitor that the return on these investments exceeds the depreciation to ensure sustained growth.