Which of the Following Will Be Categorized as an Operating

question 129

Multiple Choice

Which of the following will be categorized as an operating activity on the statement of cash flows?

• A)Cash received by selling old equipment
• B)Cash paid for purchase of new machinery
• C)Cash paid for purchase of office supplies
• D)Cash received as a contribution from the owner

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Definitions:

Beginning Inventory

The initial quantity of goods available for sale at the start of an accounting period.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting sold goods.

Operating Cash Flows

Cash generated from a company's normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Financially Healthy

Describes a state where an individual or organization is in good financial condition, with stable cash flow, manageable debt, and solid financial indicators.