All of the Following Activities Are Classified as Operating Activities

question 87

Multiple Choice

All of the following activities are classified as operating activities on a statement of cash flows except ________.

• A)purchase of inventory
• B)sale of treasury bills with a 60-day maturity date
• C)payments from customers
• D)purchase of a Certificate of Deposit

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Definitions:

Depreciation Expense

Depreciation expense is the allocation of the cost of a tangible asset over its service life, reflecting the decrease in its value over time.

Book Value

The net value of a company's assets minus its liabilities, often used as an estimate of an asset's value if it were to be liquidated.

Accrued Property Taxes

Property taxes that have been incurred but not yet paid, typically recorded as a liability on the balance sheet.

Cost of Land

The purchase price and all associated costs, such as legal fees and surveying, of acquiring land for business use.