ExpertEasy2 marksMultiple Choice
ACCA · Question 27 · Statement of Cash Flows
Which of the following items would be classified under 'Investing Activities' in a statement of cash flows?
Which of the following items would be classified under 'Investing Activities' in a statement of cash flows?
Answer options:
A.
Cash proceeds from issuing new ordinary shares.
B.
Cash paid for income taxes.
C.
Cash proceeds from the sale of a factory building.
D.
Cash paid for interest on a bank loan.
How to approach this question
Identify which transaction relates to the acquisition or disposal of long-term assets and other investments.
Full Answer
C.Cash proceeds from the sale of a factory building.✓ Correct
According to IAS 7 Statement of Cash Flows, investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. The sale of a factory building (a non-current asset) generates cash flows from investing activities.
Common mistakes
Confusing investing activities with financing activities (like issuing shares or paying dividends).
Practice the full ACCA FA — Financial Accounting Practice Exam 3
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