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

Question

Quizplus · Accepted Answer

The cash flows from operating activities should include changes in the inventory because it is an essential part of the manufacturing process. Options A and B are related to investing and financing activities, respectively. Option D is an initial investment and not an operating activity.

On a Statement of Cash Flows for a Manufacturer of Digital