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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Which of the following would be classified as a cash outflow from an operating activity?

a. Purchase of an investment

b. Payment of dividends

c. Purchase of equipment

d. Payment of goods purchased from suppliers

To determine

Introduction:

A cash flow statement normally breaks out an organization’s cash sources and uses for the period into three classifications: cash flow from operating activities, cash flow from investing activities, and cash flow from financing exercises.

To choose:

Which of the following would be classified as a cash outflow form an operating activity?

Explanation

Explanation for correct answers:

Option (d) Payment of goods purchased from suppliers, company purchased goods for the operating the business main activity so run the business. So, that this is operating activities in the head of working capital.

Explanation for incorrect answers:

Option (a) Purchase of an investment means company invest this machine for long term purpose...

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