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 the above is correct.

Question

Quizplus · Accepted Answer

A purchase of equipment for cash is a type of investment in the company's long-term assets and is reported as an investing activity in the statement of cash flows. Operating activities involve the day-to-day business operations, while financing activities involve obtaining or repaying funds to finance operations or investments.

A Purchase of Equipment for Cash Is