Activities That Are Included in the Operating Activities Section of the Statement

question 44

Multiple Choice

Activities that are included in the operating activities section of the statement of cash flows include which of the following?

• A)Activities that obtain the cash needed to launch and sustain the business
• B)Activities that increase or decrease long-term assets
• C)Activities that create revenue or expenses in the entity's major line of business
• D)None of the above

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Definitions:

Cost of Goods Sold

Specific costs directly linked to the creation of products sold by a business.

Inventory Cost Formula

Methods such as First-In, First-Out (FIFO), Last-In, First-Out (LIFO), and weighted average cost used to calculate the cost of goods sold and ending inventory valuation.

FIFO

Stands for "First-In, First-Out," an inventory valuation method where goods sold are those that are oldest in the inventory first.