Assume that the E-Zip Corporation uses the indirect method to depict cash flows. Indicate where, if at all, land and building purchased with a mortgage would be classified on the statement of cash flows.
A) Operating activities section.
B) Investing activities section.
C) Financing activities section.
D) Does not represent a cash flow.

Question

Quizplus · Accepted Answer

Purchasing land and building with a mortgage does not involve an immediate cash outflow, as the transaction is financed through a mortgage. Therefore, it does not represent a cash flow in the statement of cash flows.

Assume That the E-Zip Corporation Uses the Indirect Method to Depict