Question

Under U.S. GAAP, cash flows from investing activities do not include:a. cash payments to acquire equipment.b. cash received from selling investments in securities of another company.c. investment revenue in cash.d. cash paid to buy land.

Answer 1

Answer:

The correct answer is letter "C": investment revenue in cash.

Explanation:

Cash flows from investing activities are portrayed in the Cash Flow Statement indicating the amount o cash that was generated or spent from investment-related activities of the company. Usually, cash payments to acquire physical assets, receipts from the sale of intangible assets, cash payments or receipts for the sale of bonds or shares of other companies, and cash payments in the form of loans are considered in the cash flows from investing activities.

According to the U.S. Generally Accepted Accounting Principles (GAAP), investment revenue in cash is reported as an inflow from operating activities.