Operating activities are transactions and events associated with selling a product or providing a service related to
A) the revenues and expenses reported on the income statements.
B) the assets and liabilities reported on the balance sheet.
C) the net income reported on the statement of retained earnings.
D) the retained earnings reported on the balance sheet.

Question

Quizplus · Accepted Answer

Operating activities are all the transactions and events related to the primary business operations of the company, which result in revenues and expenses reported on the income statement. These activities include sales of products or services, purchase of inventory, payment of wages, rent, and other expenses necessary to carry out the business operations. The other options listed are either reports or statements that are affected by operating activities, but are not necessarily a part of them.

Operating Activities Are Transactions and Events Associated with Selling a Product