MC Qu. 29 (LO11-4) Which of the following is an example of a cash... Which of the following is an example of a cash inflow from an investing activity? Multiple Choice Receipt of cash from the sale of equipment. Receipt of cash from the sale of inventory. Receipt of cash from the issuance of common stock. Receipt of cash from the issuance of a note payable.
Question
MC Qu. 29 (LO11-4) Which of the following is an example of a cash... Which of the following is an example of a cash inflow from an investing activity?
Multiple Choice
Receipt of cash from the sale of equipment.
Receipt of cash from the sale of inventory.
Receipt of cash from the issuance of common stock.
Receipt of cash from the issuance of a note payable.
Solution
The correct answer is "Receipt of cash from the sale of equipment."
Here's why:
Investing activities in a cash flow statement typically involve changes in equipment, assets, or investments. So, the sale of equipment would fall under this category, as it involves the transfer of a physical asset.
On the other hand, the sale of inventory is considered an operating activity, not an investing activity. This is because inventory is part of the day-to-day operations of a business.
The issuance of common stock and the issuance of a note payable are both financing activities. They involve changes in the size and composition of the company's contributed equity and borrowings.
Similar Questions
Which of the following is an example of a cash inflow from an investing activity?Multiple ChoiceReceipt of cash from customersReceipt of cash from the sale of equipmentReceipt of cash from the issuance of common stockReceipt of cash from the issuance of bonds
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Which of the following is an example of a cash outflow for a financing activity?Multiple ChoicePayment of cash for suppliesPayment of cash for the purchase of equipmentPayment of cash for treasury stockPayment of cash for interest expense
Item 3Which of the following would be included in cash flows from investing activities?Multiple ChoiceCash collected from customers.Cash received from an issuance of bonds.Cash dividends paid.Cash used to purchase equipment.
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