Question

Classification of Transactions

Below are several transactions that took place in Seneca Company last year:
A. Paid suppliers for inventory purchases.
B. Bought equipment for cash.
C. Paid cash to repurchase its own stock.
D. Collected cash from customers.
E. Paid wages to employees.
F. Equipment was sold for cash.
G. Common stock was sold for cash to investors.
H. Cash dividends were declared and paid.
I. A long-term loan was made to a supplier.
J. Income taxes were paid to the government.
K. Interest was paid to a lender.
L. Bonds were retired by paying the principal amount due.
Required:
Indicate how each of the above transaction would be classified on a statement of cash flows.

Answer 1

Classification on the statement of cash flows will be as follows :

A. Cashflow from Operating Activities

B. Cashflow from Investing Activities

C. Cashflow from Financing Activities

D. Cashflow from Operating Activities

E. Cashflow from Operating Activities

F. Cashflow from Investing Activities

G. Cashflow from Financing Activities

H. Cashflow from Financing Activities

I. Cashflow from Financing Activities

J. Cashflow from Operating Activities

K. Cashflow from Operating Activities

L. Cashflow from Financing Activities

Step-by-step explanation:

There are three categories of classifying Cash flows on the Statement of Cash flows which are : Cashflow from Operating Activities, Cashflow from Investing Activities and Cashflow from Financing Activities.