Classification of Cash Flows

question 33

Essay

Classification of cash flows
Indicate how each of the following events should be classified in a statement of cash flows for the current calendar year.Use the following code: O = operating activities,I = investing activities,and F = financing activities
Assume use of the direct method.If the event does not involve a cash flow that should be included in the statement of cash flows,use an X.
____ (a)Paid an account payable for inventory purchased in a prior accounting period.
____ (b)On December 28,made a large credit sale; terms,2/10,n/30.
____ (c)Received a dividend from an investment in IBM common stock.
____ (d)Paid a dividend to stockholders.
____ (e)Paid the interest on a note payable to First Bank.
____ (f)Paid the principal amount due on the note payable to First Bank.
____ (g)Transferred cash from a checking account into a money market fund.
____ (h)Made an adjusting entry to record accrued wages payable at the end of the period.
____ (i)Recorded depreciation expense for the current year.
____ (j)Purchased plant assets for cash.

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Definitions:

Attitude

A learned tendency to consistently respond positively or negatively to people or events.

Perception Influences

Perception influences denote the factors that affect how individuals interpret and understand their environment and experiences.

Recognizing

The action or process of identifying someone or something from previous encounters or knowledge.

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates.