In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?
A) sale of equipment at book value
B) sale of merchandise on credit
C) declaration of a cash dividend
D) issuance of bonds payable at a discount

Question

Quizplus · Accepted Answer

The sale of equipment at book value is considered an investing activity because it involves the sale of a long-term asset. The other options are not investing activities: sale of merchandise on credit is an operating activity, declaration of a cash dividend is a financing activity, and issuance of bonds payable at a discount is also a financing activity.

In Preparing a Statement of Cash Flows, Which of the Following