Which of the Following Items Would Be Included as an Operating

question 51

Multiple Choice

Which of the following items would be included as an operating activity on the statement of cash flows, using the direct method?

• A)purchase of treasury stock
• B)payment of dividends
• C)issuance of stock
• D)payment of interest expense

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Definitions:

GAAP

Generally Accepted Accounting Principles; refers to the framework of guidelines for financial accounting used in any given jurisdiction; commonly serves as the standard for financial reporting.

Compound Instruments

Financial instruments that contain both a liability and equity element, requiring separation for accounting purposes.

Liability

A financial obligation or debt owed by a company to another entity, payable in the future.

Legally Enforceable

Describes a contract or agreement that is binding under law and can be upheld in a court.