Purchase of land for cash would be 1. Increase in investing section 2. Decrease in investing...

Purchase of land for cash would be

1. Increase in investing section

2. Decrease in investing section

3. Increase in finance section

4. Decrease in finance section

Solutions

Expert Solution

Answer :-

Purchase of land for cash would be :-

2.) Decrease in investing section.

Investing Activitiy section = Investing activities are one of the main categories of net cash activities that businesses report on the cash flow statement. Investing activities refers to purchase and sale of long term assets and other business investments , within a specific reporting period. Investing activities are a crucial component of a company's cash flow statement, which reports the cash that's earned and spent a certain period of time.

Example:-

- Purchase of investment = Decrease in investing section

- Proceeds from sale of investments = Increase in investing section

- Purchase of fixed assets = Decrease in investing section

- Proceeds from sale of fixed assets = Increase in investing section

Finance Activity Section = Finance activity section is one of the three main components of cash flow statement. In this context, financing concerns the borrowing, repaying, or raising of money. This could be from the issuance of shares, buying back shares, paying dividends and borrowing cash.

Example:-

- Issuing bonds = Increase in financing section

- Sale of treasury stock = Increase in financing section

- Repayment of loan = Decrease in financing section

- Payment of dividend = Decrease in financing section

So in given question the answer would be :- Decrease in investing section.

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ekkarill92 answered 1 year ago

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