CFA Practice Question

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CFA Practice Question

Which of the following statement(s) is (are) true?

I. Payments of dividends are classified as financing activities (under GAAP).
II. Cash payments to purchase inventory are classified as investing activities.
III. Regardless of whether the direct or indirect method is used, the statement of cash flows will report the same dollar amount of net cash flow from operating activities.
Correct Answer: I and III

User Contributed Comments 2

User Comment
danlan II is operating because it's for inventory; cash payments for long term asset are investing activities.
sarath Inventory is typically a short term asset , so operating cash flow...under the investing activities we consider the long term assets..
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