Ensuring that there is adequate cash to pay the firm's suppliers is an example of which cash-related activity in the cash flow cycle?
A)Operating activity
B)Profitability activity
C)Investing activity
D)Financing activity

Question

Quizplus · Accepted Answer

Ensuring cash to pay suppliers is a key aspect of operating activities, which involve the cash flows generated or used in the normal course of business operations. Financing activities relate to raising and repaying capital, while investing activities are focused on acquiring and disposing of long-term assets. Profitability activities are not a category of cash-related activities in the cash flow cycle.

Ensuring That There Is Adequate Cash to Pay the Firm's