Problem: Which of the following statements about the statement of cash flows is correct?  a. A company with a net loss on the income statement will always have a net cash outflow from operating activities. b. A purchase of equipment is classified as a cash inflow from investing activities. c. Cash dividends received on stock investments are classified as cash flows from operating activities. d. Cash dividends paid are classified as cash flows from operating activities.

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Problem Details

Which of the following statements about the statement of cash flows is correct? 

a. A company with a net loss on the income statement will always have a net cash outflow from operating activities.

b. A purchase of equipment is classified as a cash inflow from investing activities.

c. Cash dividends received on stock investments are classified as cash flows from operating activities.

d. Cash dividends paid are classified as cash flows from operating activities.

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Based on our data, we think this problem is relevant for Professor Pickering's class at MERCER.