Allen Company bought a new copy machine to be depreciated straight line for three years. Where would this purchase be reflected on the Statement of Cash Flows?
A)It would be an addition to property, plant and equipment, so it would be an investing activity.
B)It would be an addition to cash, so would be reflected in the change in cash.
C)It would be an expense on the income statement, so it would be reflected in operating cash flows.
D)None of the above options is correct.

Question

Quizplus · Accepted Answer

Purchasing a new copy machine is an investment in property, plant, and equipment, which falls under investing activities on the Statement of Cash Flows.

Allen Company Bought a New Copy Machine to Be Depreciated