Question

A firm's net cash flow from operating activities includes which of the following.Select one:

A. Cash received from sale of equipment
B. Cash received from issuance of common stock
C. Cash received from sale of merchandise
D. Cash received as payment of loan from a borrower
E. None of the above

A firm's cash flow from investing activities includes.Select one:

A. Cash received from the sale of a plant asset
B. Cash paid to purchase marketable securities
C. Cash paid for a merger transaction
D. Cash paid to purchase land
E. All of the above

A firm's cash flow from financing activities includes.Select one:

A. Cash paid for merchandise purchased
B. Cash paid to acquire treasury stock
C. Cash received from sale of investment in bonds
D. Cash received as interest income
E. None of the above

Answer 1

Option C, Operating activities includes “Cash received from goods sales”

Option A, Investing activities includes “Cash received from the disposal of a building”

Option C, Financing activities includes “Cash received from the bond sales”

Explanation:

Cash flow (CF) means that the amounts of money that an institution, company or person has increased or decreased. The word is used in economics to define the amount of the money produced or spent in a specific time period.  

Types of Cash Flows activities:

• Operating activities is Business Functions directly related to its product or service market supply.

• Investment activities involve physical property acquisitions, stock transactions, or the selling of securities or land.  

• Funding activities are long-term assets and investment transactions or company events. In other terms, the funding operations consist of deals with lenders or investors used to fund companies or acquisitions.