Cash flows from investing do not include cash flows from:

Question

BlackTom AI · Accepted Answer

Investing activities include acquiring and disposing of long-term assets and making or collecting loans, so cash flows from borrowing are not part of investing.

1) Relevant knowledge points and concepts
- The statement of cash flows is divided into three sections: operating, investing, and financing activities (US GAAP and IFRS).
- Investing activities: cash inflows and outflows from buying or selling property, plant and equipment (PPE), intangible assets, long-term investments, and loans made to others or collections of those loans.
- Financing activities: cash inflows and outflows related to obtaining or repaying capital, such as issuing or repurchasing equity, issuing debt, and borrowing or repaying loans.

2) Step-by-step reasoning
- Identify the nature of the cash transaction in question: "borrowing" means obtaining cash by issuing debt or taking a loan.
- Classify borrowing: obtaining cash from lenders increases liabilities (debt) and is used to finance the business; this matches the definition of financing activities.
- Compare to investing: investing involves buying/selling long-term assets or making loans (outflows) and collecting loan principal (inflows), not obtaining funds from lenders.

3) Intermediate steps / illustrative examples
- Example inflow that is investing: cash received from sale of equipment = investing inflow.
- Example outflow that is investing: cash paid to purchase a building = investing outflow.
- Example borrowing: proceeds from a bank loan = financing inflow (not investing).

4) Why the correct answer is correct
- Borrowing is correctly excluded from investing because it changes capital structure (liabilities) rather than acquiring or disposing of long-term assets. The authoritative classification in the cash flow statement places borrowing under financing activities.

5) Why other typical options would be incorrect
- Purchase of equipment, sale of investments, or making a loan to another party are investing activities and therefore would be included, not excluded. Issuing stock or repaying debt would be financing, not investing.

6) Conclusion
Therefore, the correct classification is that cash flows from investing do not include borrowing. This confirms the provided answer: borrowing.

Cash flows from investing do not include cash flows from: 单项选择题

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