Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows:a. Purchase of investmentsb. Purchase of equipmentc. Payment for selling expensesd. Collection of accounts receivablee. Cash received from customersf. Issuance of bonds payable

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Asked Dec 20, 2019
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Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows:
a. Purchase of investments
b. Purchase of equipment
c. Payment for selling expenses
d. Collection of accounts receivable
e. Cash received from customers
f. Issuance of bonds payable

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Expert Answer

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Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and specify the other subparts (up to 3) you’d like answered.

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Operating Cash Flow:

These amount of cash flows is earned by the company through regular and ongoing operations of the business such as producing and selling goods or by providing service.

Investing Cash flow:

These amount of cash flows is earned by the company through purchase or sale of assets such as land, equipment and building.

Financing Cash Flow:

These include activities such as cash inflow from investors and cash outflow in the flow of dividend payments to shareholder. It also includes activities which impact the equity and long-term liabilities of the company.

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