1 Which of the following is part of the primary objective of

1- Which of the following is part of the primary objective of investing in temporary investments?

a. All of these choices are correct.

b. realize gains from increases in market price of the securities

c. receive dividends

d. earn interest revenue

2- On the statement of cash flows, the Cash flows from operating activities section would include

a. cash receipts from sales activities

b. payments for the acquisition of investments

c. receipts from the sale of investments

d. receipts from the issuance of capital stock

Solution

Q1. a All of these choices are correct.

Explanation: Temporary investment means surplus money being placed in investment so as to earn income n the idle money available till the time it is required for business purposes. The idea is to invest the money to get the income in the form of appreciation in value, interest income and dividend income.

Q2. Answer is a. Cash receipts from Sales activity.