Asked by Reginald Joseph on Apr 27, 2024

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The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash investing or financing activity.
E) This is not reported on the statement of cash flows.

Cash Flows

The total amount of money being transferred into and out of a business, especially as it affects liquidity.

Investing Activities

Financial transactions involving the purchase or sale of long-term assets and investments, a component of cash flow statements.

Operating Activities

Operating activities are the day-to-day functions of a business related to producing and selling its goods or services, which are reflected in its earnings.

  • Understand the classification of different types of activities in the statement of cash flows (operating, investing, financing).
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JO
Julia OlexaMay 02, 2024
Final Answer :
C
Explanation :
The purchase of equipment for cash is a type of investing activity, which involves the acquisition or sale of long-term assets such as property, plant, and equipment. Therefore, this transaction will be reported under the "Investing activities" section of the statement of cash flows.