For each of the items below, indicate whether the cash flow relates to an operating activity, an investing activity, or a financing activity. a. Cash receipts from customers for services rendered. Answer b. Sale of long-term investments for cash. Answer c. Acquisition of plant assets for cash. Answer d. Payment of income taxes. Answer e. Bonds payable issued for cash. Answer f. Payment of cash dividends declared in previous year. Answer g. Purchase of short-term investments (not cash equivalents) for cash. Answer

Question

Business

Leonel Cochran

7 January, 04:23

For each of the items below, indicate whether the cash flow relates to an operating activity, an investing activity, or a financing activity. a. Cash receipts from customers for services rendered. Answer b. Sale of long-term investments for cash. Answer c. Acquisition of plant assets for cash. Answer d. Payment of income taxes. Answer e. Bonds payable issued for cash. Answer f. Payment of cash dividends declared in previous year. Answer g. Purchase of short-term investments (not cash equivalents) for cash. Answer

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Jax Bright · Answer 1

Operations

a. Cash receipts from customers for services rendered.

d. Payment of income taxes.

Investing

b. Sale of long-term investments for cash.

c. Acquisition of plant assets for cash.

g. Purchase of short-term investments (not cash equivalents) for cash

Financing

e. Bonds payable issued for cash.

f. Payment of cash dividends declared in previous year.

Explanation:

operating activities: those which arise from the business principal activity like: collection from customer, payment to suppliers, rent payment, insurance payment, warranty expense and other which are related to the business.

investing: sales and purchases of long term assets. Investment on debt and equity securities also goes into this category if they are not cash equivalent. interest revenue also fits in here

Financing: Transactions related to issue of debt, interest paid on the outstanding debt. The stock issuance and treasury stock along with the dividends are considere financing as well.