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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.

A. operating, investing, investing.
B. investing, operating, operating.
C. investing, investing, investing.
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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.
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Edward Liu

Edward Liu

Learning Outcome Statements

describe indicators of cash flow quality;

evaluate the cash flow quality of a company;

CFA® 2024 Level II Curriculum, Volume 2, Module 15.