Consider the following cash flow items:

a. Pay amount owed to bank for previous borrowing.

b. Pay utility costs. Purchase equipment to be used in operations.

c. Purchase office supplies. Pay one year of rent in advance.

d. Pay workers' salaries.

e. Pay for research and development costs.

f. Pay taxes to the IRS.

g. Sell common stock to investors.

How many of these cash flow items involve investing activities?

Question

Journey Hunt

Business

2 May, 13:40

Consider the following cash flow items:

a. Pay amount owed to bank for previous borrowing.

b. Pay utility costs. Purchase equipment to be used in operations.

c. Purchase office supplies. Pay one year of rent in advance.

d. Pay workers' salaries.

e. Pay for research and development costs.

f. Pay taxes to the IRS.

g. Sell common stock to investors.

How many of these cash flow items involve investing activities?

+5

Answers (1)

Know the Answer?

Cash Bright · Answer 1

b. Pay utility costs. Purchase equipment to be used in operations

Only. Purchase equipment to be used in operations

Explanation:

Investing activities are the second main category of net cash activities listed on the statement of cash flows and consist of buying and selling long-term assets and other investments. In other words, this is the net amount of cash received and paid during an accounting period for long-term assets and investments. You can think of these activities like the money a company uses to invest in itself or the money it makes from its investments.