Which of the Following Items Is Classified as Part of 'Operating

question 19

Multiple Choice

Which of the following items is classified as part of 'operating activities' in the Statement of Cash Flows?

• A) Bad debts expense.
• B) Depreciation of non-current assets.
• C) Proceeds from the sale of non-current assets.
• D) Receipts from customers from the sale of goods.

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Definitions:

Tax Deductible

Expenses that reduce taxable income, as they can be subtracted directly from one's gross income before calculating the tax owed.

U.S. Tax System

The structured process by the government for collecting taxes from individuals, businesses, and other entities to fund public services and projects.

Operating Leverage

An indicator of how increases in revenue lead to expansions in operating income, showing the level of fixed expenses within a company's cost framework.

Fixed Costs

Costs that do not change with the level of goods or services produced by a business.