Chapter 14, Problem 14.2SE

To determine

Classification of activities in cash flow statement

Following are the four classifications of cash flows activities that are related to the cash flow statement:

• Operating Activities: In the operating activities section of the cash flow statement, cash inflows from the revenue of the business operations are reported, while cash outflows for the expenses for the business operations are reported.
• Investing activities: In the investing activities section of the cash flow statement, increase and decrease in the long-term assets representing outflow and inflow of cash on account of investing activities is reported.
• Financing activities: In the financing activities section of the cash flow, increase and decrease in the long-term liabilities and equities representing inflow and outflow of cash on account of financing activities are reported.
• Non-cash activities: The transactions where cash is not involved are treated as non-cash activities.

To Identify: The given items as operating (O), investing (I), financing (F), or non-cash (N) activities in the statement of cash flow.