For each of the following transactions identify the appropri

For each of the following transactions, identify the appropriate section of the statement of cash flows.

a. Receive payments on account from customers.

b. Sale of equipment.

c. Sale of stock or bond investments.

d. Purchase and reissuance of treasury stock.

e. Paid insurance expense.

f. Issue stock in exchange for equipment.

Solution

a. Operating activity.

This is part of normal operations.

b.Investment activity.

Relating to assets into which the business has made investments.

c. Financing activity.

Relating financing the business activity.

d. Purchase and reisssuance of treasury stock

  Relating financing the business activity.

e. Paid insurance expense.

  This is part of normal operations.

f. Non cash activity.

There is no involvement of cash in this transaction.

For each of the following transactions, identify the appropriate section of the statement of cash flows. a. Receive payments on account from customers. b. Sale

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