INSTRUCTIONS: Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows.

Cash Flow Classification...using the capital letter only:

O$...$Operating Activity

I...Investing Activity

F$...$Financing Activity

OI$...$Operating and Investing Activity

N$...$Noncash Transaction

Effect on Cash Flows...using the capital letter only:

I...Increase

D$...$Decrease

N$...$No Effect

Transaction Cash Flow Classification Effect on Cash Flows

Increased accounts payable.

Decreased inventory.

Increased prepaid insurance.

Earned a net income.

Issued stock for cash.

Retired long$-$term debt by issuing stock.

Purchased a long$-$term investment with cash.

Decreased interest payable.

Decreased dividends receivable.

Converted bonds to common stock.