Answer to Question #244001 in Accounting for Another you

Question

A. Choose the letter that corresponds to the correct answer.

1. All of the following are segments of cash flow statement except:

a. Investing activities c. Operating activities

b. Financing activities d. Supplemental

(Note: for nos. 2-6, identify which part of SCF will be affected using the indirect method)

2. Withdrawals by the owner

a. Investing activities c. Financing activities

b. Operating activities d. None

3. Proceeds from the sale of equipment used in the business

a. Operating activities c. Other activities

b. Investing activities d. Financing activities

4. Depreciation expense

a. Other activities c. Investing activities

b. Operating activities d. Financing activities

5. Collection from customers' long term debt

a. Operating activities c. Other activities

b. Investing activities d. Financing activities

6. Additional cash investment by the owner

a. Other activities c. Investing activities

b. Operating activities d. Financing activities

Answer 1

Solution:

A.).

1.). The correct answer is d. Supplemental.

All of the following are segments of cash flow statement except Supplemental.

A supplemental is a document that records additional or extra detail information that is not normally recorded in the accounting system.

 

2.). The correct answer is c. Financing activities.

Withdrawals by the owner falls under financing activities in the cash flow statement.

 

3.). The correct answer is b. Investing activities.

Proceeds from the sale of equipment used in the business falls under investing activities in the cash flow statement.

 

4.). The correct answer is b. Operating activities.

Depreciation expense falls under Operating activities in the cash flow statement. It is added to the net income.

 

5.). The correct answer is a. Operating activities.

Collection from customers' long-term debt falls under the Operating activities section of the cash flow statement.

 

6.). The correct answer is d. Financing activities.

Additional cash investment by the owner is included in the financing activities section in the cash flow statement.