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

Question

Quizplus · Accepted Answer

Operating activities refer to the primary revenue-generating activities of the business, such as sales of goods and services, payment of wages and salaries, and payment of operating expenses. Any cash flows that are not related to financing or investing activities would be classified as operating activities, such as receiving or paying interest, income taxes, or dividends. Choices A, B, and C relate to investing and financing activities.

For Cash Flow Reporting Purposes, Operating Activities Include