Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following factors most directly affect investing activities on the statement of cash flows?

Purchases and sales of long-term assets such as property, plant, equipment, and investments in securities

Collection of cash from customers for sales of goods

Issuance of common stock to shareholders

Payment of dividends to shareholders

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Verified step by step guidance

Understand the concept of investing activities: Investing activities on the statement of cash flows primarily involve transactions related to the acquisition and disposal of long-term assets and investments. These activities reflect how a company uses cash to invest in its future operations.

Analyze the options provided: Review each option to determine whether it directly relates to investing activities. Investing activities typically include purchases and sales of property, plant, equipment, and investments in securities, as these are long-term assets.

Eliminate unrelated options: Collection of cash from customers for sales of goods is an operating activity, as it pertains to the day-to-day operations of the business. Issuance of common stock to shareholders and payment of dividends to shareholders are financing activities, as they involve raising capital and returning profits to investors.

Focus on the correct option: Purchases and sales of long-term assets such as property, plant, equipment, and investments in securities directly affect investing activities. These transactions are recorded in the investing section of the statement of cash flows.

Conclude the reasoning: The correct answer is the option that aligns with the definition of investing activities, which is purchases and sales of long-term assets. This understanding helps clarify the classification of cash flow activities in financial accounting.