Question

Indicate the section (O, I, or F) where each of the following transactions 1 through 8 would appear on the statement of cash flows.

O. Cash flows from operating activity

I. Cash flows from investing activity

F. Cash flows from financing activity

4. Cash paid for wages

Short answer

Wages expenses are related to the compensation of the employees and it comes under operating activities.

Step-by-step solution

Definition of wages expense

The advertising expense refers to the cost incurred by the business in order to pay the compensation to the employees for the work performed by them.

Indication of sections

The wages expense will come under the cash flow from operating activities as the company will incur various costs for the compensation of labor and employees who perform various activities which help in increasing the revenue of the business. It is a regular business activity which is the reason it comes under operating activities.