Classify Each of the Following Items as an Operating, Investing

question 68

Essay

Classify each of the following items as an operating, investing, or financing activity.
1. Payment of income taxes.
2. Sale of investments.
3. Receipt of interest.
4. Issuance of common stock.
5. Purchase of intangibles.

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Definitions:

Marginal Cost

An elevation in the cumulative expense resulting from manufacturing one more unit of a product or service.

Deadweight Loss

A decrease in economic efficiency resulting from the failure to reach equilibrium in the market for a good or service.

Monopolies

Market structures characterized by a single seller who controls the market supply of a good or service and can influence the price.

Efficiency

The optimal allocation of resources to maximize desired outputs without wasting any input.