The following items would be classified as operating activities on the statement of cash flows:

A. Acquisitions of equipment, payment of dividends, revenue.

B. Proceeds from borrowing, payments of dividends, purchases of supplies.

C. Payments on loans, payments for taxes, payments for rent.

D. Delivering or producing goods for sale, services, and cash effects of transactions.

Question

Business

Donavan Huang

2 January, 20:12

The following items would be classified as operating activities on the statement of cash flows:

A. Acquisitions of equipment, payment of dividends, revenue.

B. Proceeds from borrowing, payments of dividends, purchases of supplies.

C. Payments on loans, payments for taxes, payments for rent.

D. Delivering or producing goods for sale, services, and cash effects of transactions.

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Answers (1)

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Mccall · Answer 1

The correct answer is letter "D": Delivering or producing goods for sale, services, and cash effects of transactions.

Explanation:

Operating Activities are the regular income-generating activities of a business unit. They relate to business operations such as sales and manufacturing in a corporation and they generate much of the cash flow that determines if the business is profitable.

Purchasing materials from suppliers, paying the delivery of those materials, arranging transportation from those warehouses, paying employees, managers, taxes, and rent are examples of operating activities. Other cash income proceeding from lawsuits, refunds, or sales transactions are also considered operating activities.

Operating activities along with the company's investing and financing activities are included in the Statements of Cash Flows.