Lear E14-18 Classifying items on the indirect statement of cash flows The statement of cash flows categorizes like transactions for optimal reporting. Identify each item as a(n): Operating activity-addition to net income (0+) or subtraction from net income (0-) Investing activity-cash inflow (I+) or cash outflow (1) Financing activity-cash inflow (F+) or cash outflow (F-) Non-cash investing and financing activity (NIF) Activity that is not used to prepare the indirect statement of cash flows (N) . The indirect method is used to report cash flows from operating activities. a. Loss on sale of land. i. Cash sale of land (no gain or loss). b. Acquisition of equipment by j. Issuance of long-term note payable issuance of note payable. to borrow cash. c. Payment of long-term debt. k. Depreciation Expense. d. Acquisition of building by issuance 1. Purchase of treasury stock. of common stock. m. Issuance of common stock. e. Increase in Salaries Payable. n. Increase in Accounts Payable. f. Decrease in Merchandise Inventory. o. Net income. g. Increase in Prepaid Expenses. p. Payment of cash dividend. h. Decrease in Accrued Liabilities