Royer Corporation engaged in this transaction:
Purchased inventory with cash.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.
A) Does not represent a cash flow
B) Investing activities section
C) Operating activities section
D) Financing activities section

Question

Royer Corporation engaged in this transaction:
 Purchased inventory with cash.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.
A) Does not represent a cash flow
B) Investing activities section
C) Operating activities section
D) Financing activities section

Quizplus · Accepted Answer

The transaction represents an operating activity as it involves the purchase of inventory, which will likely be sold in the normal course of the company's business. Therefore, it would appear in the operating activities section of the statement of cash flows.

Royer Corporation Engaged in This Transaction