Answer and Explanation: d. Payment of dividends would not be classified as an operating activity.
Key operating activities for a company include manufacturing, sales, advertising, and marketing activities. Cash flows from operations are an important metric used by financial analysts and investors. Operating activities can be contrasted with the investing and financing activities of a firm.
Examples of operating activities are cash receipts from sales of goods and services, cash payments to suppliers, cash payments to employees, and expenses.
Cash inflows from the sale of property, plant, and equipment is not a typical cash flow under operating activities.
Non-operating activities are one-time events that may affect revenues, expenses or cash flow but fall outside of the company's routine, core business.
What Are the 6 Types of Business Activities?Sales. The sales team is the lifeblood of every business. ... Marketing. Marketing and advertising help in developing the brand and boosting the exposure of the business and its services.Finance. ... Accounting. ... Customer Service. ... Human Resources.
Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets. Negative cash flow from investing activities might not be a bad sign if management is investing in the long-term health of the company.
What are Operating Activities? Operating activities is a classification of cash flows within the statement of cash flows. Items classified within this area are an entity's primary revenue-producing activity, so cash flows are generally associated with revenues and expenses.Feb 13, 2022
Examples of common cash flow items stemming from a firm's financing activities are: Receiving cash from issuing stock or spending cash to repurchase shares. Receiving cash from issuing debt or paying down debt. Paying cash dividends to shareholders.
Explanation: Purchase of fixed asset is NOT a cash inflow. Cash inflow is the money received by an organization as a result of its operating activities, investment activities, and financing activities.May 31, 2020
Among the given options, an increase in creditors is not a cash outflow.
Examples of non-cash items include deferred income tax, write-downs in the value of acquired companies, employee stock-based compensation, as well as depreciation and amortization.
Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock. FALSE. Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable.
Cash flows from operating activities, as part of the statement of cash flows, include cash transactions that enter into the determination of net income. TRUE. To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting. TRUE.
The statement of cash flows is an optional financial statement. TRUE. The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities. TRUE. The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash payments for a period.
Both B and C. Star's Allowance for Doubtful Accounts had a credit balance of $37,800 on January 1, 2019. During 2019, the company wrote off $30,600 of Accounts Receivable as uncollectible. The company prepared the following summary schedule from an aging of accounts receivable outstanding on December 31, 2019:
On September 1, 2016, Chopper, Inc. reported Retained Earnings of $272,000. During the month of September, Chopper generated revenues of $40,000, incurred expenses of $24,000, purchased equipment for $10,000 and paid dividends of $12,000.