Which of the following is classified as an operating activity on a statement of cash flows?
A)payment of dividends
B)sale of equipment
C)issuance of common stock
D)purchase of inventory

Question

Quizplus · Accepted Answer

Purchasing inventory is a part of the day-to-day operations of a business, making it an operating activity that affects the cash flow statement. Payment of dividends (A) is a financing activity, as it involves paying out profits to shareholders. In contrast, the sale of equipment (B) is an investing activity, as it relates to the acquisition or disposal of durable assets. Issuance of common stock (C) is also a financing activity, as it involves raising capital from investors in exchange for ownership shares.

Which of the Following Is Classified as an Operating Activity