For each of the following transactions, indicate whether operating (O), investin
ID: 2428106 • Letter: F
Question
For each of the following transactions, indicate whether operating (O), investing (I), or financing activities (F) are affected and whether the effect is a cash inflow (+) or outflow (–), or (NE) if the transaction has no effect on cash.(TIP: Think about the journal entry recorded for the transaction. The transaction affects net cash flows if and only if the account Cash is affected.)
6. Paid cash to purchase new equipment.
7. Issued long-term debt for cash.
8. Collected payments on account from customers.
9. Recorded and paid salaries to employees.
* you are going to determine what the activity and cash flows of the questions.
Activity = operating, investing, financing activity
Cash Flows = cash inflow (+) or outflow (–), or No Effect
Explanation / Answer
6. Paid cash to purchase new equipment - ( I ), ( - ) Journal Entry Equipment Dr Cash Cr 7. Issued long term debt for cash - ( F ), ( + ) Journal Entry Cash Dr Debt Instrument Cr 8. Collected payments on account from customers - ( O ), ( + ) Journal Entry Cash Dr Customers Cr 9. Recorded and paid salaries to employees - ( O ), ( - ) Journal Entry Salaries Dr Cash Cr Note: O = Operating Activities, F = Financing Activities, I = Investing Activities, + = Increase, - = Decrease. Thank you, 6. Paid cash to purchase new equipment - ( I ), ( - ) Journal Entry Equipment Dr Cash Cr 7. Issued long term debt for cash - ( F ), ( + ) Journal Entry Cash Dr Debt Instrument Cr 8. Collected payments on account from customers - ( O ), ( + ) Journal Entry Cash Dr Customers Cr 9. Recorded and paid salaries to employees - ( O ), ( - ) Journal Entry Salaries Dr Cash CrRelated Questions
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