For each of the following items, indicate which part will be affected. 1. Depreciation Expense. A....

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For each of the following items, indicate which part will be affected. 1. Depreciation Expense. A. Operating B. Investing C.

C. Financing D. No Impact 6. The proceeds from the sale of the automobile in Item #5. A. Operating B. Investing C. Financing

business accounting

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Answer 1

Answer #1

1. Option (D) is correct

Depreciation is a non cash item, so it will not affect any part of cash flow statement.

2. Option (B) is correct

Cash receipt / payment from sale or purchase of assets will affect investing activities.

3. Option (D) is correct

Loss on sale of equipment is a non cash item, so it will not affect any part of cash flow statement.

4. Option (C) is correct

Issue and repayment of equity and debt capital forms part of financing section. So, declaration and payment of dividends will affect financing activities.

5. Option (D) is correct

Gain on sale of automobile is a non cash item, so it will not affect any part of cash flow statement.

6. Option (B) is correct

Cash receipt / payment from sale or purchase of assets will affect investing activities.

7. Option (A) is correct

8. Option (A) is correct

9. Option (C) is correct

Issue and repayment of equity and debt capital forms part of financing section.

10. Option (C) is correct

Issue and repayment of equity and debt capital forms part of financing section. Purchase of company's own stock is a financing activity.

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Answer 2

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