Which of the Following Does Not Represent a Cash Flow

question 85

Multiple Choice

Which of the following does not represent a cash flow relating to operating activities?

• A)Cash dividends paid to stockholders.
• B)Cash received from customers.
• C)Interest paid to bondholders.
• D)Cash paid for salaries.Dividends paid to stockholders are considered cash flows relating to financing activities.However, U.S.GAAP requires interest paid to bondholders to be considered an operating activity.

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Definitions:

Interest Rates

Interest rates represent the cost of borrowing money or the return on invested funds, expressed as a percentage of the principal.

Borrowing

The act of receiving something with the intention of returning it or its equivalent, often referring to money with interest.

Chinese Consumers

Individuals or groups in China engaging in the purchase of goods and services.

US Goods

Products and commodities that are manufactured or produced within the United States.