- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 4. Analyzing Statements of Cash Flows I
- Subject 2. Classification of Cash Flows and Non-Cash Activities
CFA Practice Question
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
Correct Answer: B
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. |