ITPEC IP April 2023 Question 67
ITPEC IP April 2023 — Question 67 of 100
Cash received from selling the company's products is reported in operating activities. Operating cash flows arise from the principal revenue-producing activities of the business, including receipts from customers and payments to suppliers and employees. They show how normal operations generate or consume cash.
Answer (a)
Why not others:
- (b) Financing activities concern borrowing, repaying debt, issuing shares, dividends, and other capital financing
- (c) Investing activities concern acquiring or selling long-term assets and investments
- (d) Administering activities is not one of the standard three cash-flow statement categories
Key rule: Operating covers core business transactions; investing covers long-term assets, and financing covers capital and debt.
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