Exam accounting

Exam accounting.

I’m trying to study for my Accounting course and I need some help to understand this question.
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There are four parts to the Statement of Cash Flows (or Cash Flow Statement):

1. Operating Activities
2. Investing Activities
3. Financing Activities

For each of the following items, indicate which part will be affected.

	Depreciation expense
	Proceeds from the sale of equipment used in the business
	The loss on the sales of equipment in question #2
	Declaration and payment of dividends on company’s stock
	Gain on the sale of automobile formerly used in the business
	The proceeds from the sale of the automobile it item #5
	An increase in the balance in a retailer’s merchandise inventory
	An increase in the balance in accounts payable
	Retirement of long-term bonds payable
	Purchase of treasury stock (company’s own stock)
	The purchase of a new delivery truck to be used in the business
	A decrease in the balance of accounts receivable
	An increase in bonds payable (long-term liability)
	A decrease in the current asset account prepaid insurance
	A decrease in the current liability income taxes payable
	The proceeds from issuing additional common stock
	The amortization of the cost of an intangible asset
	The exchange/conversion of long-term bonds into common stock

For this question, indicate whether each action will have a positive or negative effect on cash. A positive effect could also be thought of as a source of cash, an increase in cash, or a positive amount on the cash flow statement. A negative effect could also be thought of as a use of cash, a decrease in cash, or a negative amount on the cash flow statement.

	An increase in the balance of prepaid insurance
	A decrease in supplies on hand
	The proceeds from the sale of equipment formerly used in the business
	The loss on the sale of equipment in the previous question
	An increase in the current liability income taxes payable
	A decrease in accounts payable
	An increase in accounts receivable
	An increase in the current liability warranty liability
	Dividends declared and paid
	Proceeds from the issuance of preferred stock
	The gain on the sale of equipment formerly used in the business
	An increase in the long-term asset, investment in another company

a.	negative
b.	positive

Exam accounting

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