Cash flows from operating activities,as reported on the statement of cash flows,would include
A)depreciation.
B)gain on sale of equipment
C)increase in accounts receivable.
D)all of these

Question

Quizplus · Accepted Answer

Cash flows from operating activities include all the activities related to core business operations. Depreciation is a non-cash expense that reduces net income but does not affect cash, which is added back in the cash flow from operating activities. Gain on sale of equipment is also added back to the cash flows from operating activities because it is a non-operating activity. An increase in accounts receivable means that less cash was received from customers during the period, so it is subtracted from the cash flows from operating activities to reflect the cash that was actually received. Thus, all three options are included in the cash flows from operating activities.

Cash Flows from Operating Activities,as Reported on the Statement of Cash