For Each of the Following Items, Indicate with the Letter

question 30

Essay

For each of the following items, indicate with the letter X whether the transaction would appear in the operating, investing, or financing activities section of the statement of cash flows, or is not reported in any one of these three categories. Assume the indirect method is used for reporting.

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Definitions:

Oral Contract

An agreement made through spoken words and not written, which can be legally binding.

Guaranty

A legal commitment by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults.

Enforceable

A legal term referring to a contract or agreement that can be upheld and compelled by law.