Identify Whether Each of the Following Is an Operating, Investing

question 6

Essay

Identify whether each of the following is an operating, investing, or financing cash outflow or inflow or if it is a noncash flow, under GAAP.

Purchase marketable equity securities
Dividends on marketable equity securities
Wages to employees
Depreciation
Issuance of new stock
Interest paid
Goodwill amortization
Acquisition of company using purchase accounting
Sale of land
Tax paid on sale of land
Cash paid by customers

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor costs.

Net Income

The total profit of a company after subtracting all expenses from revenues.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Fixed Costs

Fixed costs are business expenses that do not change with the level of output or sales, such as rent or salaries.