Which of the Following Activities Is an Operating Activity

question 17

Multiple Choice

Which of the following activities is an operating activity?

• A) Collections of accounts receivable.
• B) Investing in equity securities of other companies.
• C) Payment of dividends.
• D) Issuing common stock

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Definitions:

Mutually Exclusive Investments

Investment options where the choice of one option precludes the selection of another, requiring careful analysis to determine the most beneficial choice.

Incorrect Decisions

Decision-making instances that lead to unfavorable outcomes or failures due to errors in judgement, analysis, or implementation.

Target AAR

Target Average Annual Return (AAR) is a financial goal or benchmark for the average yearly return on an investment.

Project AAR

The Average Annual Return of a project, calculated by dividing the total return by the number of years.