Questions: Cash investments made by the stockholders of the business are reported on the statement of cash flows in the a. supplemental statement b. investing activities section c. operating activities section d. financing activities section

Cash investments made by the stockholders of the business are reported on the statement of cash flows in the
a. supplemental statement
b. investing activities section
c. operating activities section
d. financing activities section
Transcript text: Cash investments made by the stockholders of the business are reported on the statement of cash flows in the a. supplemental statement b. investing activities section c. operating activities section d. financing activities section
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Solution

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The answer is the fourth one (d): financing activities section.

Explanation for each option: a. Supplemental statement: This is not a standard section of the statement of cash flows. Supplemental information may be provided, but it is not where cash investments by stockholders are reported. b. Investing activities section: This section includes cash flows related to the acquisition and disposal of long-term assets and investments, not cash investments made by stockholders. c. Operating activities section: This section includes cash flows from the primary revenue-generating activities of the business, such as cash receipts from sales of goods and services, and cash payments to suppliers and employees. It does not include cash investments made by stockholders. d. Financing activities section: This section includes cash flows related to transactions with the business's owners and creditors, such as issuing stock, borrowing, and repaying debt. Cash investments made by stockholders are reported here.

Summary: Cash investments made by the stockholders of the business are reported on the statement of cash flows in the financing activities section.

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