Which of the Following Would Be Considered an Operating Activity

question 85

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)The receipt of cash from sale of equipment
• D)Dividends paid to shareholders

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Definitions:

Cost Flow Assumption

The method used to allocate costs to inventory and cost of goods sold, such as FIFO, LIFO, or weighted average.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, providing a measure of central tendency.

Purchase Costs

Expenses incurred to acquire goods or services, including the buying price and other associated costs.

Inventory Control

The management practice of overseeing and controlling the ordering, storage, and use of components that a company uses in the production of the items it sells.