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 is considered an investing activity as it involves the disposal of a long-term asset.

B) Sale of merchandise on credit is considered an operating activity as it relates to the company's primary business operations of selling goods.

C) Declaration of a cash dividend is considered a financing activity as it involves distributing profits to shareholders.

D) Issuance of bonds payable at a discount is considered a financing activity as it involves obtaining funding through borrowing.

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