In a Statement of Cash Flows, Receipts from Sales of Property

question 46

Multiple Choice

In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should be classified as cash inflows from

• A) operating activities.
• B) financing activities.
• C) investing activities.
• D) selling activities.

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Definitions:

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collectible, serving as a contra-asset on the balance sheet.

Bad Debt Expense

An expense reported by businesses to cover accounts receivable that are unlikely to be collected.

Adjusting Entry

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Written Instrument

A legal document delineating rights, duties, or liabilities, often used in financial and property transactions.