Question

Cash paid for equipment would be reported on the statement of cash flows in_________.
a. the cash flows from operating activities section.
b. the cash flows from financing activities section.
c. the cash flows from investing activities section.
d. a separate schedule

Answer 1

Answer:

c. the cash flows from investing activities section.

Explanation:

Basically there are three types of activities:

1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.

2. Investing activities: It records those activities which include purchase and sale of the fixed assets

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.