Identify investing activities from the items given below. (Select all that apply.)Check All That ApplyCollection of notes receivableCollection of notes receivableSale of propertySale of propertyIssuance of bondsIssuance of bondsPurchase of equipmentPurchase of equipmentReceipt of interestReceipt of interestReceipt of dividends
Question
Identify investing activities from the items given below. (Select all that apply.)Check All That ApplyCollection of notes receivableCollection of notes receivableSale of propertySale of propertyIssuance of bondsIssuance of bondsPurchase of equipmentPurchase of equipmentReceipt of interestReceipt of interestReceipt of dividends
Solution
Investing activities are those that involve the purchase and sale of long-term assets, such as property, plant, equipment, or securities. From the items given, the investing activities are:
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Collection of notes receivable: This is not an investing activity. Notes receivable are typically considered a part of operating activities because they are often tied to a company's core operations.
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Sale of property: This is an investing activity. When a company sells property, it is disposing of a long-term asset.
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Issuance of bonds: This is not an investing activity. Issuing bonds is a financing activity because it involves raising capital for the company.
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Purchase of equipment: This is an investing activity. When a company purchases equipment, it is acquiring a long-term asset.
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Receipt of interest: This is not an investing activity. Receipt of interest is typically considered an operating activity because it is tied to a company's core operations.
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Receipt of dividends: This is not an investing activity. Receipt of dividends is typically considered an operating activity because it is tied to a company's core operations.
So, the investing activities from the items given are "Sale of property" and "Purchase of equipment".
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