Question

Indicate whether the following is true or false. If the answer is false, explain why. 1....

Indicate whether the following is true or false. If the answer is false, explain why.

1. Purchases and sales of securities are never reported as investing activities in a statement of cash flows. TRUE or FALSE

2. Purchases and sales of securities are always reported as financing activiies in a statement of cash flows. TRUE or FALSE

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Answer #1

1) False
Purchases and sales of securities are reported as investing activities in a statement of cash flows.
When Purchases and sales of securities are not treated as cash equivalent and trading securities then they are treated cash flow from investing activities.
2) False
Purchases and sales of securities are always reported as Investing activiies in a statement of cash flows.
Financing activities in a statement of cash flows accounts for inflows and outflows of debt issuance and raising capital activities rather than Purchases and sales of securities, these are accounted under cash flow from investing activities

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