Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows:
Classifying
Obj. 1Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows:
- Purchase of investments
- Disposal of equipment
- Payment for selling expenses
- Collection of
accounts receivable - Cash sales
- Issuance of bonds payable
Cash flow from financing activities:
Under the cash flow from financing activities of a cash flow statement, the items included consist of the net flows of cash used to fund the company. Financing activities normally include transactions like involving debt, equity and dividends.
Cash flow from investing activities:
A cash flow from investing activities section of a cash flow statement reports the net change in the investment gains and losses of the organization during the reporting period. This also reports the change resulting from any purchase or sale of fixed asset during the period.
Cash flow from operating activities:
A cash flow from operating activities section of a cash flow statement reports the sources and uses of cash from regular business activities for a specific period. Operating activities include receipts from good sold, payments to employees and suppliers.
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