Part 1Which of the following would be reported on a statement of cash flows as an investing activity? Part 1
A. payment of cash dividends B. depreciation expense C. purchase of treasury stock D. sale of equipment for cash

Question

Part 1Which of the following would be reported on a statement of cash flows as an investing​ activity? Part 1
A. payment of cash dividends B. depreciation expense C. purchase of treasury stock D. sale of equipment for cash

BlackTom AI · Accepted Answer

Investing activities include cash flows from acquiring and disposing of long-term assets and investments, so the sale of equipment for cash is classified as an investing cash inflow.

1) Relevant knowledge points and concepts
- A statement of cash flows groups cash flows into three sections: operating, investing, and financing.
- Investing activities: cash transactions involving purchase or sale of property, plant and equipment, and long‑term investments.
- Financing activities: cash transactions with owners and creditors that change long‑term liabilities and equity (e.g., dividends, treasury stock, issuing or repaying debt).
- Operating activities: cash flows related to normal business operations; noncash items like depreciation are adjusted in the operating section (as a reconciling item) but do not themselves represent cash flow.

2) Step-by-step classification of each option
- A. Payment of cash dividends — Classify as financing activity: cash outflow to owners. Not investing.
- B. Depreciation expense — Noncash expense. It reduces net income but requires a positive adjustment when preparing cash flows from operating activities; it is not an investing activity.
- C. Purchase of treasury stock — Company buying back its own shares uses cash to reduce equity; this is a financing cash outflow, not investing.
- D. Sale of equipment for cash — Company converts a long‑lived asset into cash; this is a cash inflow from investing activities.

3) Intermediate steps (explicit reasoning)
- Equipment is a long‑lived tangible asset. Selling it generates cash from disposal of an investing asset → investing inflow.
- Dividends and treasury stock affect equity financing transactions → financing section.
- Depreciation involves no cash movement; it’s an operating adjustment.

4) Why the correct answer is correct
Sale of equipment for cash directly fits the definition of investing activities: cash received from disposing of property, plant, and equipment.

5) Why other options are incorrect
- A: Dividends paid = financing outflow.
- B: Depreciation = noncash adjustment in operating activities.
- C: Purchase of treasury stock = financing outflow (repurchase of equity).

6) Conclusion
Therefore, the correct choice is D. sale of equipment for cash, which matches the provided answer.

Part 1Which of the following would be reported on a statement of cash flows as an investing activity? Part 1 A. payment of cash dividends B. depreciation expense C. purchase of treasury stock D. sale of equipment for cash单项选择题

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Part 1Which of the following would be reported on a statement of cash flows as an investing​ activity? Part 1 A. payment of cash dividends B. depreciation expense C. purchase of treasury stock D. sale of equipment for cash单项选择题