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Basic Question 1 of 8

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.

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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Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data

CFA® 2025 Level I Curriculum, Volume 2, Module 4.