Cash Inflows from Investing Activities

C

All responses qualify as cash inflows from investing activities.

The correct answer is B. Proceeds from selling investments in the equity securities of other companies.

Cash inflows from investing activities refer to the cash generated or received from the buying and selling of long-term assets or investments. These activities are reported in the statement of cash flows, specifically in the investing activities section.

Let's analyze each answer choice to understand why B is the correct option:

A. Proceeds from collecting the principal amount of loans: This represents cash inflows from financing activities rather than investing activities. Cash inflows from collecting loan principal amounts are associated with the repayment of debt and are classified as cash inflows from financing activities.

B. Proceeds from selling investments in the equity securities of other companies: This option represents cash inflows from investing activities. When a company sells its investments in the equity securities (such as stocks) of other companies, it receives cash. The proceeds from such sales are considered cash inflows from investing activities.

C. All of these answers are correct: This option is incorrect because answer choice A is associated with cash inflows from financing activities, not investing activities.

D. Proceeds from selling investments in the debt securities of other entities, except cash equivalents: This option is incorrect because it specifically mentions selling investments in debt securities. Cash inflows from selling debt securities are classified as cash inflows from investing activities. However, the statement excludes cash equivalents, so it is not a comprehensive option as it leaves out a specific category of investments.

In summary, the correct answer is B. Proceeds from selling investments in the equity securities of other companies because it represents a cash inflow from investing activities.