For cash flow reporting purposes, operating activities include:
A) buying and selling of non-current assets;
B) incurring and extinguishing equity and debt;
C) acquisition and disposal of investments;
D) activities not otherwise classified as financing and investing.

Question

Quizplus · Accepted Answer

Operating activities refer to the day-to-day business operations that result in cash inflows or outflows. This includes revenue and expenses related to the core business activities, such as sales, inventory, and operating expenses. Activities related to buying and selling of non-current assets (investing activities) and incurring and extinguishing equity and debt (financing activities) are not included in operating activities. Acquisition and disposal of investments may be considered an investing activity, depending on the nature of the investment. Therefore, only activities that do not fall under financing or investing activities are included in operating activities for cash flow reporting purposes.

For Cash Flow Reporting Purposes, Operating Activities Include