Listed Below Are the Reporting Classifications for a Statement of Cash

question 134

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. $$\begin{array} { | l | l | l | } \hline \text { CLASSIFICATION } & \text { TRANSACTIONS } & \text { NUMBER } \\\hline \text { 1. Operating cash outflow } & \begin{array} { l } \text { Interest received on cash } \text { savings account. }\\\end{array} & -\\\hline \text { 2. Not reported for the statement of cash flows} & \text { Cash purchase of inventory. } &- \\\hline \text { 3. Financing cash outflow } & \text { Cash dividends received under the equity method. } & -\\\hline \text { 4. Operating cash inflow } & \text { Principal payment on a note. } & -\\\hline \text { 5. Investing cash inflow } & \begin{array} { l } \text { Distribution of a stock } \text { dividend. }\\\end{array} & -\\\hline\end{array}$$

---

Definitions:

Nature and Purpose

The intrinsic qualities and the fundamental reasons something exists or is done, aimed at achieving specific goals.

Fiduciary Duties

Obligations one party has to act in the best interest of another when entrusted with care or responsibility, especially in financial matters.

Directors and Officers

Individuals appointed or elected to manage and direct a corporation's affairs, respectively responsible for corporate policies and day-to-day operations.

Selected

Chosen from a group based on specific criteria or for a specific purpose.