______________________________
Current assets | Current liabilities
- - - - - - - - -- -- - | - - - - - - - - - - - - - -
A . . . . . . . . . . . . | . . . . E
Cash transactions above the dashed line are Operating Activities. Those in A are Investing Activities; those is the E (equities) area are Financing Activities. Transactions that don't involve cash don't belong in any of these three categories.
Given the above, journalize the three entries and you should be able to see where the cash came from or went. The first three are obviously receipts of cash, a debit, but what is the credit? When you decide what to credit, you will see where it belongs in the above T-account. Same with the credit to cash. What are you going to debit? Is it above the dashed line or below?
Are the following three activities considered "operating" or "financing"?
1. Grant Proceeds from a foundation
2. A donation by an individual
3. Paying for a one-year insurance policy up-front
