Question

Classifying Cash Flows - Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows:
a. Retirement of bonds payable
b. Purchase of inventory for cash
c. Cash sales
d. Repurchase of common stock
e. Payment of accounts payable
f. Disposal of equipment

Answer 1

Answer:

Classifying Cash Flows:

Retirement of bonds payable  ⇒  Financing activity

Purchase of inventory for cash  ⇒  Operating activity

Cash sales  ⇒  Operating activity

Repurchase of common stock  ⇒  Financing activity

Payment of accounts payable  ⇒  Operating activity

Disposal of equipment ⇒  Investing activity