Question

Indicate whether each of the following cash activities would be reported on the statement of cash flows as (a) an operating activity, (b) an investing activity, or (c) a financing activity.

1. Paid for advertising
2. Paid for office equipment
3. Issued capital stock
4. Paid officers' salaries
5. Sold services
6. Paid rent
7. Paid dividends
8. Issued a note payable
9. Paid rent
10. Sold excess office equipment

Answer 1

Given list of cash activities is divided among operating activities, financing activities and investing activities in the explanation section.

Step-by-step explanation:

1. Paid for Advertising Operating Activity
2. Paid for Office Equipment Investing Activity
3. Issued Capital Stock Financing Activity
4. Paid officers salaries Operating Activity
5. Sold services Operating Activity
6. Paid rent : Operating Activity
7. Paid dividends: Financing Activity
8. Issued a note payable: Financing Activity
9. Paid rent: Operating Activity
10. Sold excess office equipment: Investing Activity

Operating Activities include cash generated from operations, Interest Paid and Tax Paid.

Investing Activities include payment to acquire or proceeds from sale of property, plant and equipment, proceeds from government grants, interest and dividend received.

Financing Activities include proceeds from issue of shares, proceeds from long term borrowings, dividends paid etc.