Exercise 1-33 Business Activities
Listed below are various activities that companies engage in during a period.
a. Purchase Of equipment
b. Payment of a dividend
c. Purchase Of supplies
d. Sale of equipment
e. Sale Of goods or services
f. Borrow money from a bank
g. Contribution Of cash by owners
Required:
For each of the activities listed above, classify the activity as operating (O), investing (I), or financing (F).
Concept Introduction:
Cash Flow statement:
The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three categories as follows:
To Indicate:
The type of the activity for each of the given transactions.
The type of the activity for each of the given transactions is explained as follows:
Transaction | Type of activity | |
a. | I | Purchase of equipments is an Investing activity for the business |
b. | F | Payment of Dividend is an Financing activity for the business |
c. | O | Cash payment to suppliers is an operating activity for the business |
d... |
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