The sale of an intangible asset for cash is classified in the statement of cash flows as an Investing activity.

Here's why:

The statement of cash flows is divided into three sections: Operating Activities, Investing Activities, and Financing Activities.

1. Operating Activities: This section includes cash activities related to net income. For example, cash received from customers, cash paid to suppliers and employees, interest paid, and taxes paid.

2. Investing Activities: This section includes cash activities related to noncurrent assets. Noncurrent assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities. In this case, the sale of an intangible asset falls under this category.

3. Financing Activities: This section includes cash activities related to noncurrent liabilities and owners’ equity. For example, obtaining cash from issuing debt and repaying the amounts borrowed, and receiving cash from or distributing cash to owners.

So, the sale of an intangible asset for cash is an Investing activity because it involves a noncurrent asset.

Question

The sale of an intangible asset for cash is classified in the statement of cash flows as an Investing activity.

Here's why:

The statement of cash flows is divided into three sections: Operating Activities, Investing Activities, and Financing Activities.

1. Operating Activities: This section includes cash activities related to net income. For example, cash received from customers, cash paid to suppliers and employees, interest paid, and taxes paid.

2. Investing Activities: This section includes cash activities related to noncurrent assets. Noncurrent assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities. In this case, the sale of an intangible asset falls under this category.

3. Financing Activities: This section includes cash activities related to noncurrent liabilities and owners’ equity. For example, obtaining cash from issuing debt and repaying the amounts borrowed, and receiving cash from or distributing cash to owners.

So, the sale of an intangible asset for cash is an Investing activity because it involves a noncurrent asset.

Knowee AI · Accepted Answer

The sale of an intangible asset for cash is classified in the statement of cash flows as an Investing activity.

Here's why:

The statement of cash flows is divided into three sections: Operating Activities, Investing Activities, and Financing Activities.

1. Operating Activities: This section includes cash activities related to net income. For example, cash received from customers, cash paid to suppliers and employees, interest paid, and taxes paid.

2. Investing Activities: This section includes cash activities related to noncurrent assets. Noncurrent assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities. In this case, the sale of an intangible asset falls under this category.

3. Financing Activities: This section includes cash activities related to noncurrent liabilities and owners’ equity. For example, obtaining cash from issuing debt and repaying the amounts borrowed, and receiving cash from or distributing cash to owners.

So, the sale of an intangible asset for cash is an Investing activity because it involves a noncurrent asset.

MC Qu. 9 (LO11-1) The sale of an intangible asset for... The sale of an intangible asset for cash is classified in the statement of cash flows as a(n): Multiple Choice Investing activity. Financing activity. Operating activity. Noncash activity.

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