Final answer:
The sale of treasury stock represents a cash inflow for a company and is recorded in the financing section of the cash flow statement.
Step-by-step explanation:
The sale of treasury stock by a company is classified as a cash inflow in the financing section of the cash flow statement. When a company sells its treasury stock, it is essentially re-issuing shares it had previously bought back and is now selling them to investors. This transaction represents an inflow of cash as the company receives funds from the investors who purchase the treasury shares.