Question

For each of the following transactions, indicate whether the cash flow is an operating, investing, or financing activity for purposes of preparing a statement of cash flows. In addition, be specific with respect to whether the activity leads to an inflow of cash or an outflow of cash from the company's perspective. A company pays salaries to employees. Choose... A company receives cash for services it will perform in the future. Choose... A company pays back the principal on a bank loan evidenced by a promissory note. financing activity - outflow of cash Choose... A company sells equipment previously used in its business for cash. A company makes a cash purchase of equipment to be used in its business. investing activity - outflow of cash A company pays a cash dividend to its stockholders. Choose...

Answer 1

Answer:

Paying salaries to employees is a cash out flow and an operating activity

Receiving cash for services it will perform in the future is a cash inflow and an operating activity

Pays back principal on a bank loan evidenced by a promissory note is a cash outflow and a financing activity

Sells equipment previously used in business  for cash is a cash inflow and an investing activity

Cash purchase of equipment to be used in business is a cash outflow and an investing activity

Payment of cash dividend to the stockholders in a cash outflow and a financing activity

Explanation: