Which of the Following Would Not Be Included in the Operating

question 18

Multiple Choice

Which of the following would not be included in the operating activities section of a statement of cash flows?

• A) Cash inflows from returns on loans (i.e., interest).
• B) Cash inflows from returns on equity securities (i.e., dividends).
• C) Cash outflows to governments for taxes.
• D) Cash outflows to reacquire treasury stock.

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Definitions:

Accounting Equation

The basic principle that equates assets with the sum of liabilities and shareholders' equity, formulated as Assets = Liabilities + Equity.

Liabilities

Financial obligations or debts that an entity owes to external parties, which must be settled over time through the transfer of economic benefits.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing owners' claims on the company's resources.

Increase Assets

The process by which a company's resources, valuable to its operations and financial growth, are augmented or enlarged.