Which of the following is not classified among the operating activities in a statement of cash flows?
A)Payment of interest on a bank loan.
B)Payment of the principal amount owed on a bank loan.
C)Payment of an account payable to a merchandise supplier.
D)Payment of income taxes.

Question

Quizplus · Accepted Answer

Payment of the principal amount owed on a bank loan is classified as a financing activity, not an operating activity. Operating activities involve cash flows related to the day-to-day operations of the business, such as payments to suppliers for inventory and receipt of cash from customers for sales. Payment of interest on a bank loan, payment of an account payable to a merchandise supplier, and payment of income taxes are all examples of operating activities.

Which of the Following Is Not Classified Among the Operating