Sale of equipment is a cash from investing activities.

outflow

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disbursement

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distribution

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inflow

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Solution

The correct option is D inflow
Items that may be included in the investing activities line item include the following: Purchase of fixed assets (negative cash flow) Sale of fixed assets (positive cash flow) Purchase of investment instruments, such as stocks and bonds (negative cash flow). Hence, the sale of equipment is a cash inflow from investing activities.

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Similar questions

Sale of fixed assets is ___ while calculating cash flow from investing activities.

Purchase of investment is ___ while calculating cash flow from investing activities.

Q. Identify the transactions as belonging to (i) Operating Activities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash and Cash Equivalents:

(a) Cash Sale of Goods	(b) Cash Received against Revenue from Services rendered
(c) Cash Purchase of Goods	(d) Cash Paid against Services Taken
(e) Patents Purchased	(f) Marketable Securities
(g) Bank Overdraft	(h) Proceeds from Issue of Debentures
(i) Purchase of Shares	(j) Repayment of Long-term Loan
(k) Commission Received	(l) Redemption of Debentures
(m) Interest on Debentures	(n) Interest on Investments
(o) Income Tax Paid	(p) Income Tax Paid on Gain of Sale of Asset
(q) Cash Received from Debtors	(r) Cash Paid to Creditors.

Use the following information to calculate net cash flow from operating activities using indirect method:

$\begin{matrix} Net Income & 7, 000 Depreciation Expense & 1, 000 Increase in Accounts Receivable & 4, 400 Increase in Prepaid Rent & 7, 000 Decrease in Prepaid Insurance & 1, 300 Increase in Accounts Payable & 14, 000 Increase in Wages Payable & 1, 000 Decrease in Income Tax Payable & 700 Gain on Sale of Equipment & 1, 800 \end{matrix}$

An example of cash flow from investing activity is :

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