Which section reports cash flows from investments in noncurrent assets?

Which section reports cash flows from investments in noncurrent assets?

• A. Operating activities
• B. Financing activities
• C. Investing activities
• D. Tax activities

Answer: (C)

Cash flows are categorized by activity: investing, operating, and financing. The investing section specifically tracks cash that relates to acquiring and disposing of long-term assets—things like property, plant and equipment, intangible assets, and long-term investments. When a company spends cash to buy a noncurrent asset, or receives cash from selling one, that cash flow belongs here. Operating activities reflect the day-to-day business operations, financing activities cover borrowing and repaying debt or issuing equity, and taxes are generally shown within operating activities. Therefore, cash flows from investments in noncurrent assets are reported in the investing activities section.

Cash flows are categorized by activity: investing, operating, and financing. The investing section specifically tracks cash that relates to acquiring and disposing of long-term assets—things like property, plant and equipment, intangible assets, and long-term investments. When a company spends cash to buy a noncurrent asset, or receives cash from selling one, that cash flow belongs here. Operating activities reflect the day-to-day business operations, financing activities cover borrowing and repaying debt or issuing equity, and taxes are generally shown within operating activities. Therefore, cash flows from investments in noncurrent assets are reported in the investing activities section.