Determine proper classification (LO11-1) Analysis of an income statement, balance sheet, and additional information from the accounting records of Gadgets, Inc., reveals the following items. Required: Select the section of the statement of cash flows in which each of these items would be reported: operating activities (indirect method), investing activities, financing activities, or a separate noncash activities note.

1. Purchase of a patent.
2. Depreciation expense
3. Issuance of a note payable
4. Increase in inventory

1. Purchase of a patent - Investing activities

2. Depreciation expense - Operating activities

3. Issuance of a note payable - Financing activity

4. Increase in inventory - Operating activity

Explanation:

Operating activity of cash flows include cash inflows and cash outflows from day to day business activities. This includes cash flows use from ongoing business activities.

Investing activity of cash flows includes cash inflows and cash outflows from investments of the business. This includes purchase of assets, sale of assets, investment in securities.

Financing activity of cash flows include cash inflows and cash outflows to fund the company. The activities that are incurred to fiance the business are classified as financing activity.

answer; the cpi;

credit history is used by lenders to determine whether you are a 'risky' person to give their money to.

having a short history provide very little data for the lenders. they wouldn't be able to determine your credit behavior from such a small samples. even if they are perfect.

having long credit history with few blemishes provide larger and more accurate data for the lenders to predict your credit behavior.