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Basic Question 2 of 9
According to GAAP, available-for-sale investments should be included in ______ cash flow, dividends from such investments should be included in ______ cash flow, and interests from such investments should be included in ______ cash flow.
B. investing, operating, operating.
C. investing, investing, investing.
A. operating, investing, investing.
B. investing, operating, operating.
C. investing, investing, investing.
User Contributed Comments 4
| User | Comment |
|---|---|
| Thorne91 | im confused why is it not Investing, Financing, Operating |
| r3v3r3n6o | Hi Thorne91, dividends paid are in Financing, but the question states dividends are received from the previous investment, so they are treated as interests, and therefore, included in Operating. |
| syazwan21 | The way I think of it is simply anything that affects net income in the income statement reflects CFO which is why dividends and interest RECEIVED are considered under CFO. |
| choas69 | @Thorne91: interest and dividends received and interest expenses are reflected in the income statement therefore they are in CFO. |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe indicators of cash flow quality;
evaluate the cash flow quality of a company;
CFA® 2025 Level II Curriculum, Volume 2, Module 14.