In preparing the Statement of Cash Flows, which of the following transactions would be considered an investing activity?
A) sale of equipment at book value
B) Sale of merchandise on credit
C) Declaration of cash dividend
D) Issuance of bonds payable at a discount

Question

Quizplus · Accepted Answer

The sale of equipment at book value is a transaction related to the acquisition or disposal of long-term assets and therefore is considered an investing activity in the statement of cash flows. The sale of merchandise on credit is a revenue-generating transaction and is not included in the statement of cash flows. The declaration of cash dividend is a financing activity, and the issuance of bonds payable at a discount is also a financing activity that involves raising funds from investors.

In Preparing the Statement of Cash Flows, Which of the Following