[GettingMyCPA]

Can someone explain to me the difference on the Statement of Cash flows between the Operating Activities of “Trading Securities” and the Investing Activities of “Trading Securities”

I keep getting MCQ incorrect because I don’t know if the investments they are referring to go into Operating or Investing Activities.

Wiley has a questions that shows an investment: MES* (Available for sale) *= Cost and market value

Then asks “Under investing activities, cash outflows during 2010 totaled?” In their answer they include the investment of MES in the investing activities, why isn’t it in Operating Activities?

FAR - July 3
AUD - Aug 17

[rhine500]

Trading Securities can go under “Operating Activities” or “Investment Activities”.

Available-for-Sale Securities must go under “Investing Activities”

MES is an Available for Sale security so it must go under “Investing”

FAR: 92
AUD: 99
BEC: 90
REG: 95

[GettingMyCPA]

How do I know or find out which trading securities are “Operating Activities” securities?

TIA!

FAR - July 3
AUD - Aug 17

[rhine500]

The question will tell you how the company classifies their Trading securities, either Operating or Investing.

I guess if they didn't tell you then you have to look at the answers to see. It should be obvious. There is only 1 right answer. There can't be two right answers, with one having the security classified as Operating and the other having it classified as Trading. That sounds confusing.

If you get any questions wrong on this and don't understand it then just post it.

FAR: 92
AUD: 99
BEC: 90
REG: 95

[Author]

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