Asked by Kristen Salcedo on Jun 11, 2024

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In a statement of cash flows, which of the following would be classified as an investing activity?

A) The sale of the company's own common stock for cash.
B) The sale of equipment.
C) Interest paid to a lender.
D) The issuance of bonds payable.

Investing Activity

A category in financial statements that represents cash flows related to the purchase or sale of long-term assets or investments.

Statement Of Cash Flows

A financial statement that highlights the major activities that impact cash flows and, hence, affect the overall cash balance.

Sale Of Equipment

The process of selling off business assets, such as machinery or office equipment, usually to generate cash.

  • Understand the components and categorization of cash flows within operating, investing, and financing activities.
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MN
Mabuda NessaJun 12, 2024
Final Answer :
B
Explanation :
The sale of equipment is a cash inflow from investing activities, as it involves the disposal of a long-term asset.

Option A is incorrect because the sale of common stock is a financing activity, as it involves the issuance of equity.

Option C is incorrect because interest paid to a lender is a cash outflow from operating activities or financing activities.

Option D is incorrect because the issuance of bonds payable is a cash inflow from financing activities.