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1 vote
How would the sale of a building be classified?

1) Operating inflow.
2) Financing inflow.
3) Investing inflow.
4) Operating outflow.

1 Answer

4 votes

Final answer:

The Correct option is 3). The sale of a building by a company is classified as an investing inflow, reflecting the disposal of a long-term asset and recorded in the investing section of the cash flow statement.

Step-by-step explanation:

The sale of a building would be classified as an investing inflow. When a company sells a building, it is disposing of a long-term asset, which is part of its investment activities. This transaction is recorded in the investing section of the company's cash flow statement, reflecting a gain of cash and therefore, is considered an inflow. Companies obtain money from such sales, and this inflow is separate from the company's primary operating activities or financing activities, which might include issuing stock or borrowing through banks or bonds.

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