For Each of the Following, Identify Whether It Would Be

question 170

Short Answer

For each of the following, identify whether it would be disclosed as an operating
(O), financing
(F), or investing
(I) activity on the statement of cash flows under the indirect method.
a. Gain from sale of land
b. Paid dividends
c. Purchased equipment
d. Net income
e. Issued company's common stock
f. Amortization expense

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Definitions:

Cover

A buyer’s right to substitute goods for those due under a sales or lease agreement when the seller provides nonconforming goods.

Substitute Goods

Products that can be used in place of each other, satisfying the same needs or wants.

Lease Agreement

A contract between a lessor and a lessee for the rental of property, usually real estate, for a specified period of time.

Insolvent

The state of being unable to pay debts owed, often leading to bankruptcy proceedings.