Accounting · Cash Flow Statement Analysis
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Reporting a negative cash flow from investing activities is not inherently a sign of poor financial health for a firm. Reason R: Negative investing cash flows frequently reflect productive capital expenditures, such as the acquisition of property, plant, and equipment intended for long-term growth. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are correct but R is NOT the correct explanation of A
- 2Both A and R are correct and R is the correct explanation of A✓
- 3A is correct but R is not correct
- 4A is not correct but R is correct
Correct answer
Both A and R are correct and R is the correct explanation of A
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