Which of the Following Is an Operating Activity

question 31

Multiple Choice

Which of the following is an operating activity?

• A)Issuing common stock.
• B)Paying dividends.
• C)Borrowing cash from a bank to acquire a factory.
• D)Paying electricity bills for the month.

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Definitions:

Compounded Monthly

Calculating interest on a principal sum along with any accumulated interest of the previous periods with each cycle occurring every month.

Trust Fund

A legal arrangement where assets are held by a trustee for the benefit of another person or group.

Compounded Monthly

A method of calculating interest in which the interest earned each month is added to the principal, and the following month's interest is calculated on the new total.

Perpetuity

A financial instrument that pays a fixed amount of cash flow indefinitely.