Operating activities are both inflows and outflows of cash resulting from the external financing of a business.

Question

Quizplus · Accepted Answer

Operating activities refer to inflows and outflows of cash resulting from the day-to-day operations of a business, such as sales and expenses. On the other hand, financing activities refer to cash flows generated by external sources, such as investments and borrowing, to finance the business. Therefore, these two types of activities are different, and their definitions do not overlap.

Operating Activities Are Both Inflows and Outflows of Cash Resulting