Question

Which of the following would appear in the cash flows from investing activities section of the statement of cash flows?

a. Cash received from stock issued
b. Cash received from bonds payable
c. Depreciation expense on equipment
d. Cash paid for equipment

Answer 1

The correct answer is:

d. Cash paid for equipment

Cash flows from investing activities include transactions related to the acquisition or sale of long-term assets such as property, plant, and equipment. Cash paid for the purchase of equipment would be categorized as an investing activity because it involves the outflow of cash for the acquisition of a long-term asset.