Indicate whether each of the following statements regarding the statement of cash flows (SCF)is true or false.
a)________ Purchase of merchandise inventory on account would appear in the operating activities section of the SCF.b)________ Sale of treasury stock would appear in the investing activities section of the SCF.c)________ Cash proceeds from the sale of a used truck would appear in the operating activities section of the SCF.d)________ Cash purchases of marketable securities would appear in the investing activities section of the SCF.e)________ Payment of salaries would appear in the operating activities section of the SCF.

Question

Quizplus · Accepted Answer

b)False c)False d)True e)T
a)This is false. The purchase of merchandise inventory on account does not involve cash.b)This is false. The sale of treasury stock is a financing activity.c)This is false. Proceeds from the sale of a truck are recorded as an investing activity.d)This is true. Cash flows reported as investing activities include cash payments (outflows)for purchasing property, plant, equipment, or marketable securities, as well as for making loans to borrowers.e)This is true. Cash flows reported as operating activities include cash payments for expenses, including salaries expense.

Indicate Whether Each of the Following Statements Regarding the Statement