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The statement of cash flows for Andrews Company shows what happens in the Cash account during the year. Please answer which of the following is true if Andrews repurchases some of its common stock:
a. It is a use of cash and will be shown in the investing section as a subtraction
b. It is a source of cash and will be shown in the investing section as an addition
c. It is a source of cash and will be shown in the financing section as an addition
d. It is a use of cash and will be shown in the financing section as a subtraction

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Erudite1
The correct option is A.
The cash flow is divided into three segments which are operating activities, investing activities and financing activities. Investing activities refers to the operations that involve purchases or sales of assets, loans made to suppliers or received from customers and payments related to merger and acquisition.
Investing activities are considered as a use of cash and it is shown in the investing section as a subtraction.

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