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Question 1

The statement of cash flows categorizes like transactions for optimal reporting.

Identify each item as a(n):

  • Operating activity—add to net income (O+) or subtraction from net inc. (O–)
  • Investing activity—cash inflow (I+) or cash outflow (I–)
  • Financing activity—cash inflow (F+) or cash outflow (F–)
  • Non-cash Investing and Financing activity (N)

Cash Flow ItemsClassification
Issuance of common stock
Payment of cash dividend
Acquiring equipment by issuing Note payable
Payment of long-term debt
Depreciation expense
Increase in Prepaid Expense
Loss on sale of land
Decrease in Merchandise Inventory
Decrease in Accrued Liabilities
Cash sale of land
Acquiring building for common stock
Net Income
Increase in Salaries Payable
Issuing a long-term note payable to borrow cash
Increase in Accounts Payable
Purchase of treasury stock


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MathQuill
   x  x    n  |   | (   ) π DNE
   x    (   ) π DNE
( ) ( ] [ ) [ ] —∞ DNE
< > or All Real Numbers DNE
log logn ln n  | | e 
sin cos tan arcsin arccos arctan  
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