During 19X2, a computer was donated to a charity organisation.At that time, the charity intended to use the computer to coordinate its activities and maintain its volunteer database.It was subsequently discovered that the computer was inadequate for the organisation's needs, and it was sold for cash by the organisation during 20X2.In this organisation's cash flow statement for 20X2, which one of the following combinations of classification of cash flows is correct?
Cash Outflow$\quad$$\quad$ Cash Inflow
A)$\quad$$\quad$-$\quad$$\quad$$\quad$$\quad$$\quad$Investing
B)$\quad$$\quad$- $\quad$$\quad$$\quad$$\quad$$\quad$Financing
C)$\quad$Investing $\quad$$\quad$$\quad$ Investing
D)$\quad$Operating $\quad$$\quad$$\quad$Operating

Question

Quizplus · Accepted Answer

The cash inflow from selling the computer is classified as an investing activity because it involves the sale of a long-term asset. There is no cash outflow associated with the computer in 20X2, as it was a donation received in a prior year and not a purchase.

During 19X2, a Computer Was Donated to a Charity Organisation \quad

During 19X2, a Computer Was Donated to a Charity Organisation $\quad$