Question

#33 QS 12-1 A Saved Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indi 1 QS 12-1 (Algo) Classifying transactions by activity LO C1 1 points Classify the following cash flows as either operating, investing, or financing activities, assuming the indirect method. Answer is complete but not entirely correct. 1. 2. ✓ 3. 4. 5. 6. 7. 8. Cash Flow Paid cash interest on outstanding notes. Paid cash for property taxes on building. Paid cash for utilities. Paid cash for rent. Received cash from sale of land. Received cash from sale of equipment. Cash paid to purchase short-term investments. Paid long-term debt with cash. Paid cash dividends. Paid cash for wages and salaries. Activity Operating Operating Operating Operating Investing Investing Operating Financing Financing Operating ✓ 9. 10.

Answer 1

It can be seen that all the answers except point number 7 are correct. Only point number 7 is Incorrect

Correct Activity for Point 7 Cash paid to purch ase short term investment is Investing

The main activities which falls under cash flow from investing activities are purchase and sale of assets and investments. Investment can be either Long-term or short term. Thus, Cash paid to purchase short term investment is Investing