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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Which of the following would be considered a cash outflow for investing activities?

  1. a. cash paid to purchase product for inventory
  2. b. cash paid to reacquire common stock
  3. c. cash paid to repay debt
  4. d. cash paid to purchase equipment

To determine

Identify the correct answer that would be considered as cash outflow from investing activities.

Explanation

Cash outflows: The amount of cash paid by a company for the operating, investing, and financing activities of the business during a certain period is referred to as cash outflow.

Investing activities: Investing activities includes cash inflows and cash outflows from purchase and sale of land or equipment, or investments.

Justification for correct answer:

Option (d) Acquirement of equipment is investing activities of a company. Hence, option (d) is correct answer...

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