Which of the Following Would Be Considered an Operating Activity

question 28

Multiple Choice

Which of the following would be considered an operating activity on the cash flow statement?

• A)Payment to purchase equipment
• B)The sale of inventory
• C)Dividends paid to shareholders
• D)The receipt of cash from sale of equipment

---

Definitions:

Compounded Interest

Interest that is computed on both the original amount of money and the interest it has already earned over past periods, whether it’s a savings or a loan.

Investments

Assets or items acquired with the intention of generating income or appreciating in value over time.

Annually

Occurring once every year; relating to a period or cycle of one year.

Compounded Annually

A technique for computing interest in which the interest accrued annually is compounded to the principal amount, resulting in a balance that not only expands but does so at an accelerating pace.