Sales of long-term investments are part of which cash flow section?

• A. Investing
• B. Operations
• C. Financing
• D. Taxes

Answer: (A)

Classification on the cash flow statement groups cash moves into operating, investing, and financing activities. The sale of long-term investments is an investing activity because it involves cash from disposing of assets held for the long term, not from everyday business operations. Investing activities cover purchases and sales of long-term assets and investments, while operating activities reflect day-to-day business cash flows and financing activities involve changes in debt and equity. Taxes aren’t a separate section; tax cash flows are typically part of operating activities. So selling a long-term investment is categorized under investing activities.