Question

Which of the following cash flows should be included in the investing Section of the statement of cash

flows under US GAAP? Drag the cash transaction to the appropriate column
ITEMS
CASH RECEIVED IN
SALE OF
EQUIPMENT
CASH PAID TO
PURCHASE
INVENTORY
PURCHASE OF A
PIECE OF LAND
CASH RECEIVED FOR
GOODS SOLD LAST
MONTH
SALE PROCEEDS
FROM DEBT
INVESTMENTS
CASH CONTRIBUTED
BY AN OWNER
PRINCIPAL
RECEIVED FROM
LOANS MADE TO
OTHERS
PAYMENT TO
REACQUIRE SHARES
PROCEEDS FROM
ISSUING STOCKS
INTEREST EARNED
IN CASH

Answer 1

Cash flow items to be included in the investing section of the statement of cash flows under US GAAP

1. Cash received in sale of Equipment

2. Purchase of a piece of land

3. Sale proceeds from debt investments

Step-by-step explanation:

Cash flow from investing activities is a section of the cash flow statement that shows the cash generated or spent relating to investment activities. Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets.

Some examples of investment activity from the company’s perspective would include:

Cash outflow from the purchase of an asset (land, building, equipment, etc.).

Cash inflow from the sale of an asset.

Cash outflow from the acquisition of another company.

Cash inflow resulting from a merger.

Cash inflow resulting dividends paid on stock owned in another company.