Question 1

The purchase of long-term assets by issuing debt is classified in the statement of cash flows as a(n):

Operating activity

Investing activity

Financing activity

Noncash activity

1 points

QUESTION 2

The purchase of inventory for cash is classified in the statement of cash flows as a(n):

Operating activity

Investing activity

Financing activity

Noncash activity

1 points

QUESTION 3

Which of the following is an example of a cash inflow from a financing activity?

Receipt of cash from the issuance of common stock

Receipt of cash from the sale of equipment

Receipt of cash from the collection of a note receivable

Receipt of cash from the sale of inventory

1 points

QUESTION 4

In preparing a statement of cash flows under the indirect method, an increase in accounts payable would be reported or included as a(n):

Addition to net income in the operating activities section

Deduction from net income in the operating activities section

Investing activity

Financing activity