Respuesta :
Investing cash flows affect long-term asset accounts. The entire change in a company's cash position due to gains or losses on investments and investments in fixed assets is shown by cash flow from investing activities.
What is cash flows?
Cash flow refers to the quantity of money that a business gets or transfers to its debtors in the form of cash or cash equivalent. The liquidity condition of the business is frequently studied using cash flow analysis. Understanding cash flow effectively is crucial because it enables you to pinpoint your sources of income and your spending habits. With this knowledge, you may act appropriately to maintain a positive cash flow and eventually reach your financial objectives.
Investing activities entail long-term uses of capital in their cash flow. Buying or selling a fixed asset, such as real estate, machinery, or equipment, would be considered investing. Additionally, funds received as a consequence of a merger or acquisition or the proceeds from the sale of a division would be considered investment activities.
Hence, Investing cash flows affect long-term asset accounts. The entire change in a company's cash position due to gains or losses on investments and investments in fixed assets is shown by cash flow from investing activities.
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