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Indicate the Reporting Classification That Would Apply to Each of the Following

Question 131

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Indicate the reporting classification that would apply to each of the following transactions

Premises:

Responses:

Payment of cash dividends.

Not reported for the statement of cash flows

Purchase of treasury stock.

Noncash financing and investing activity

Investment of excess cash in an interest-bearing security classified as a cash equivalent.

Financing cash outflow

Appropriation of retained earnings for expansion of the R&D program.

Financing cash inflow

Acquisition of equipment under a finance lease agreement.

Premises:

Payment of cash dividends.

Purchase of treasury stock.

Investment of excess cash in an interest-bearing security classified as a cash equivalent.

Appropriation of retained earnings for expansion of the R&D program.

Acquisition of equipment under a finance lease agreement.

Responses:

Not reported for the statement of cash flows

Noncash financing and investing activity

Financing cash outflow

Financing cash inflow

Correct Answer:

Premises:

Responses:

Payment of cash dividends.

Purchase of treasury stock.

Investment of excess cash in an interest-bearing security classified as a cash equivalent.

Appropriation of retained earnings for expansion of the R&D program.

Acquisition of equipment under a finance lease agreement.