Practice Quiz

CFP Certified Financial Planner Test Prep

Category - Accounting

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The purchase of treasury stock would be shown under which section on the statement of cash flows?
  1. Operating
  2. Investing
  3. Financing
  4. Supplemental
  5. It is not reported on the statement of cash flows.
Explanation
Answer - C - The purchase of treasury stock would be reported under the financing section on the statement of cash flows.

Key Takeaway: Treasury stock is the corporation’s own stock that it is reacquiring, thus it is a financing activity. Changes in stockholder’s equity and long term liabilities are both shown in the financing portion of the statement.
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