Question

6) The ________ section of the statement of cash flows includes increases and decreases in long-term assets. A) investing activities B) operating activities C) non-cash operating activities D) financing ac

Answer 1

Answer:

A) investing activities

Explanation:

The cash flow statement includes three sections which are Operating Activities, Investing Activities and Financing Activities. This means that non-cash operating activities is not a section in the cash flow statement.

In the section, operating activities is where the decrease or increase in the current assets and current liabilities is mentioned. Therefore, this sections does not state the long term assets affects. Financing activities refers to those funds that are affected by the change in non-current liabilities (such as bank loans) and capital.

Investing activities is the part in the cash flow statement where the impact of non-current assets (long term assets) are referred out such as acquisition and/or selling of properties, plant and equipment. Therefore, part A) investing activities is the correct answer.