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Purchase of treasury stock would be 1. increase in investing activities 2. Decrease in investing activities...

Purchase of treasury stock would be

1. increase in investing activities

2. Decrease in investing activities

3. Increase in financing activities

4. Decrease in financing activities

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Answer #1

Ans. Option 4  Decrease in financing activities

Explanation: Purchase of treasury stock is shown with negative sign in the financing activities section of cash flow statement. This is a cash outflow transaction so it would decrease financing activities.

*Issuance of shares/ bonds/ debentures or loan taken are the cash inflow transactions of financing activities.

*Transactions related to purchase/ sale of long term assets or investments are related to investing activities section of cash flow statement.

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