Question: Denis says, I understand that operating activities are affected by changes in current asset and current liability accounts. I also know that trading investments are

Denis says, "I understand that operating activities are affected by changes in current asset and current liability accounts. I also know that trading investments are current assets and that the purchase and sale of trading investments are recorded as operating activities. What I don't understand is why the purchase and sale of investments that are not held for trading are usually classified as investing activities." Help Denis understand the classification of investments?

Step by Step Solution

★★★★★

3.54 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

When a business invests money it does so outside of its m... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1160-B-M-A-S-O-C-F(4440).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Laurel says, "I understand that operating activities are affected by changes in current asset and current liability accounts. I also know that short-term loans payable are current liabilities. What I...

Motta Storage Company had the following balances in its Equipment and Accumulated Depreciation on Equipment accounts at the beginning and end of 2012. During 2012, Mona engaged in the following...

Onwards and Upwards Corporation has paid cash dividends to its shareholders for eight consecutive years. The board of directors' policy requires that in order for a dividend to be declared, cash...

Question 4 --/1 View Policies Current Attempt in Progress Denis says, "I understand that operating activities are affected by changes in current asset and current liability accounts. I also know that...

(LO 2, 3) Denis says, I understand that operating activities are affected by changes in current asset and current liability accounts. I also know that trading investments are current assets and that...

Use the following income statement and information about changes in non-cash current assets and current liabilities to present the cash flows from operating activities using the direct method:...

Use the following income statement and information about changes in noncash current assets and current liabilities to present the cash flows from operating activities using the direct method: Changes...

Use the following income statement and information about changes in non-cash current assets and current liabilities to present the cash flows from operating activities using the indirect method:...

5 The following income statement and information about changes in noncash current assets and current liabilities are reported. 1.5 points SONAD COMPANY Income Statement For Year Ended December 31,...

please help me out. The following income statement and information about changes in noncash current assets and current liabilities are reported. SONAD COMPANY Income Statement For Year Ended December...

Let T: C4 M2,2 be given by Find a basis of R(T). Is T surjective? ab ab+ c 5

Read Oedipus the king (1281) by Sophocles & death of a salesman by Arthur miller (1424) and answer the following: 1) Briefly summarize the tragedies in both plays. 2) The text states that these...

Download and examine the U.S. Census Bureaus Business and professional Classification Survey (SQ-CLASS), available through the Get Help with Your Form link at www.census.gov/econ/. a. Give an example...

2.5 In the short run, labor supply is influenced by the wage rate, while in the long run, it is influenced by net advantages of the job. (True/False) 723 the equilibrium quantity of nursing

Tanya Company purchases a patent for $156,000 on January 2, 2012. Its estimated useful life is 6 years. (a) Prepare the journal entry to record amortization expense for the first year. (b) Show how...

Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2009 (in millions): other plant assets $965.8; land $221.6; patents and trademarks (at cost) $515.1;...

Ndon Company reported net income of $157,000. It reported depreciation expense of $12,000 and accumulated depreciation of $47,000. Amortization expense was $8,000. Ndon purchased new equipment during...

O d. Avoidance The probability distribution associated with the role of a die: * O a. can be used to forecast the risk of restaurant law suits b. is a non-normal distribution O c. is known in advance...

Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 10 percent. Year Project...

Net present value Using a cost of capital of 16%, calculate the net present value for the project shown in the following table and indicate whether it is acceptable, The net present value (NPV) of...