For each of the following items, indicate whether it would be classified as eith

Question

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) financing and investing activity.

1. Cash sales of merchandise

2. Sale of land for cash

3. Signed a note payable in exchange for cash

4.Purchased supplies for cash

5. Paid cash to settle an accounts payable

6. Purchased a warehouse in exchange for shares of its stock

7. Paid interest on a note payable

8. Reissued its own treasury stock

9. Purchased equipment for cash

10. Purchased equipment in exchange for a 6 month note payable

Explanation / Answer

Hi,

Please find the answer as follows:

1) O (Operating)

2) I (Investing)

3) F (Financial)

4) O (Operating)

5) O (Operating)

6) N (Significant (N) financing and investing)

7) O (Operating)

8) F (Financial)

9) I (Investing)

10) N (Significant (N) financing and investing)

Thanks.

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