Which of the following activities would not have an effect on cash? 1 pointDepreciation of office equipment.Payment of bank interest.Payment of dividends.Collections from customers.
Question
Which of the following activities would not have an effect on cash? 1 pointDepreciation of office equipment.Payment of bank interest.Payment of dividends.Collections from customers.
Solution
The activity that would not have an effect on cash is the "Depreciation of office equipment."
Here's why:
-
Depreciation of office equipment: This is a non-cash transaction. Depreciation is the process of allocating the cost of a tangible asset over its useful life. It's an accounting method to account for the asset's wear and tear over time. It does not involve any cash outflow, hence it does not affect cash.
-
Payment of bank interest: This is a cash transaction. When the company pays interest to the bank, it reduces the company's cash balance.
-
Payment of dividends: This is also a cash transaction. When a company pays dividends to its shareholders, it's distributing its earnings in the form of cash, which reduces the company's cash balance.
-
Collections from customers: This is a cash transaction. When a company collects money from its customers, it increases the company's cash balance.
Similar Questions
What impact does the sale of equipment have on the statement of cash flows? Increase in cash from investing activities Increase in cash from operating activities Decrease in cash from operating activities Increase in cash from financing activities
Which of the following is classified under cash flow from operating activities? a. Purchase of office equipment for cash b. Income taxes paid c. Dividend paid d. Sale of office equipment for cash
On the statement of cash flows activities from operations include ______.Multiple choice question.cash incurred by taking on or repaying business debtcash used in or provided by the firm's investment activitiescash received or spent on long term assetscash transactions associated with running the business
Identify the effect, if any, that each of the following transactions would have upon cash and retainedearnings. The first transaction has been completed as an example.Note: Transactions that affect profits do not necessarily affect cash.
Which of the following is not included in the operating activities section of a cash flow statement? A. Dividend payments B. Cash received from customers C. Cash paid to suppliers D. Payment for salaries
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.