Which of the following items would be classified as a cash flow from investing activities?

1) Issue common stock for cash
2) Payment on principal of note payable
3) Payment of dividends
4) Sale of equipment for cash

A)1 and 4
B)4 only
C)3 only
D)1,2,3,and 4

Question

Which of the following items would be classified as a cash flow from investing activities?

1) Issue common stock for cash 
2) Payment on principal of note payable 
3) Payment of dividends 
4) Sale of equipment for cash

A)1 and 4
B)4 only
C)3 only
D)1,2,3,and 4

Quizplus · Accepted Answer

Cash flows reported as investing activities include cash receipts (inflows)from selling property,plant,equipment (item 4),or marketable securities,as well as collections from credit instruments such as notes or mortgages receivable.Cash flows reported as investing activities also include cash payments (outflows)for purchasing property,plant,equipment,or marketable securities,as well as for making loans to borrowers.The other items listed (2,3,and 4)are cash flows reported as financing activities.

Which of the Following Items Would Be Classified as a Cash