A purchase of equipment for cash is:
A)Reported as an operating activity in the statement of cash flows.
B)Reported as an investing activity in the statement of cash flows.
C)Reported as a financing activity in the statement of cash flows.
D)None of these answer choices is correct.

Question

Quizplus · Accepted Answer

A purchase of equipment for cash is an investing activity as it involves the acquisition of a long-term asset. Operating activities are related to the day-to-day operations of the business, while financing activities are related to the issuance or repayment of debt and equity.

A Purchase of Equipment for Cash Is