The Appropriate Statement of Cash Flow Activity Category for the Purchase

question 42

Multiple Choice

The appropriate statement of cash flow activity category for the purchase of equipment for cash is

• A)Operating
• B)Financing
• C)Investing
• D)Schedule of noncash investing or financing activity
• E)Not reported on the statement of cash flows

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Definitions:

Operational Decision

An Operational Decision involves choices made by an organization's management regarding day-to-day operations that affect its performance and efficiency.

Primary Market

The financial market segment where new securities are issued and sold for the first time, often through public offerings or private placements.

Securities

Ownership instruments in the form of stocks for publicly-quoted companies, creditor agreements represented by bonds with either corporations or governmental bodies, or claims to ownership through options.

General Public

The broad group of people in society who do not have a specialized interest in financial markets or investments but may be affected by its outcomes.