An Example of an Operating Activity Is

question 32

Multiple Choice

An example of an operating activity is:

• A) Paying wages.
• B) Purchasing office equipment.
• C) Borrowing money from a bank.
• D) Selling shares.
• E) Paying off a loan.

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Definitions:

Doubtful Accounts

Doubtful accounts are receivables that a company believes might become uncollectible in the future, leading to their designation as a bad debt expense.

Sales Discounts

Reductions to the selling price of goods or services, offered to customers to encourage prompt payment or to incentivize bulk purchases.

Accrual Basis

An accounting method where revenue and expenses are recognized when they are earned or incurred, regardless of when cash transactions occur.

Cash Basis

Cash basis accounting is an accounting method where revenue and expenses are recorded only when cash is received or paid, respectively.