On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from operating activities would include:
A)the money borrowed from the bank to start the company
B)the sale of land adjacent to the manufacturer's administrative office building
C)repayment of long-term loan by a wholesaler of weather-related items
D)purchase of new $25,000 copying machine
E)increases in the manufacturer's inventory

Question

Quizplus · Accepted Answer

Increases in the manufacturer's inventory are considered part of the cash flows from operating activities because they relate directly to the core business operations, such as producing and selling digital thermometers. Operating activities involve the cash effects of transactions that enter into the determination of net income.

On a Statement of Cash Flows for a Manufacturer of Digital