Question

  Investing cash flows most likely reflect changes in which of the balance sheets’ components?

A Noncurrent assets Correct Answer Incorrect Answer
B Noncurrent liabilities and equity Correct Answer Incorrect Answer
C Current assets and current liabilities Correct Answer Incorrect Answer
D Equity Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Investing cash flows are most likely linked to a firm’s noncurrent assets. Operating cash flows are associated with current assets and liabilities. Noncurrent liabilities and equity are related to financing cash flows.

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