Question

A company is preparing its 2019 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Please select how each item will affect the company's statement of cash flows.

Group of answer choices

Purchase of land and building

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Increase in inventory

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Depreciation expense

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Payment of dividends

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Increase in accounts payable

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Purchase of equipment using a note

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Issuance of bonds

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Purchase of treasury stock

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Sale of available-for-sale debt investment

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Gain on sale of equipment

      [ Choose ]            Cash receipt in investing section            Noncash investing and financing activity            Deducted from net income in the operating section            Cash payment in investing section            Cash payment in financing section            Cash receipt in financing section            Not on the statement of cash flows            Added to net income in the operating section      

Previous

Answer 1

--Requirements asked

Purchase of land and building	Cash payment in investing section
Increase in inventory	Deducted from net income in the operating section
Depreciation expense	Added to net income in the operating section
Payment of dividends	Cash payment in financing section
Increase in accounts payable	Added to net income in the operating section
Purchase of equipment using a note	Noncash investing and financing activity
Issuance of bonds	Cash receipt in financing section
Purchase of Treasury Stock	Cash payment in financing section
Sale of available-for-sale debt investment	Cash receipt in investing section
Gain on sale of equipment	Deducted from net income in the operating section

No.	Conceptual Notes
1	Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.
2	Effects of Non - Cash Transaction are adjusted from Net Income.
3	Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.
4	Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income
5	Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income