Classify Each of the Following Transactions for the Purpose of the Statement

question 21

Short Answer

Classify each of the following transactions for the purpose of the statement of cash flow as operating activities (OA), investing activities (IA), financing activities (FA), or not reported on the statement of cash flows (NA).
1) ____ Made adjusting entry to recognize interest revenue on investments.
2) ____ Borrowed funds from the bank.
3) ____ Paid rent in advance for the next six months.
4) ____ Paid cash to settle accrued salary expense.
5) ____ Purchased supplies on account.
6) ____ Collected accounts receivable.
7) ____ Sold land.

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Definitions:

Perpetual fund

A type of investment fund with no fixed termination date, allowing investors to contribute and withdraw capital indefinitely.

Compounded annually

Interest on a deposit or loan calculated once per year, where each year's interest is added to the principal.

Semi-annual compounded

Interest on an investment is calculated twice a year and added to the principal.

Nominal rate

The stated or face interest rate on a loan or investment, not adjusted for inflation or the frequency of compounding.