Listed Below Are the Reporting Classifications for a Statement of Cash

question 49

Essay

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Indicate the reporting classification that would apply to each of the five transactions described below by placing the number of the reporting classification in the space provided by each transaction. $$\begin{array} { | l | l | l | } \hline \text { CLASSIFICATION } & \text { TRANSACTIONS } & \text { NUMIBER } \\\hline \text { 1. Investing cash outflow } & \begin{array} { l } \text { Acquisition of equipment by issuing } \\\text { ponds payable. }\end{array} & -\\\hline \text { 2.Noncash financing and } & \text { Repayment of long-term debt by issuing } & \\\text { investing activity } & \text { preferred stock. } & -\\\hline \text { 3. Financing cash outflow } & \text { Interest received on trading securities. } & -\\\hline \text { 4. Investing cash inflow } & \text { Cash sale of a patent at book value. } & -\\\hline & \text { Loan of cash to a supplier in exchange } & \\\text { 5. Operating cash inflow } & \text { for a six-month note receivable. } & -\\\hline\end{array}$$

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Definitions:

General Journal

The general journal is a primary accounting record used to enter all transactions through debits and credits, serving as the initial point of data entry.

Accounts Receivable

Represents money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Liabilities of a business that are due to be paid to creditors within a short period, usually one year.

General Journal

A primary accounting record used to track all financial transactions of a business, entered in chronological order.