Asked by Julian Munoz on May 13, 2024
Verified
On the statement of cash flows, the Cash flows from operating activities section would include
A) receipts from the issuance of capital stock
B) payment for interest on short-term notes payable
C) payments for the purchase of investments
D) payments for cash dividends
Operating Activities
Transactions and events related to the primary business activities, such as cash received from sales of goods or services and cash paid for inventory, that affect the cash flow of a company.
Short-Term Notes
Debt securities with a maturity of less than one year, used by companies to manage short-term liquidity needs.
Capital Stock
The total amount of shares that a company is authorized to issue, representing ownership in the company.
- Comprehend the idea of cash movements originating from operations, investments, and financial transactions.
- Recognize the division of transactions in the statement of cash flows into categories like operating, investing, and financing activities.
Verified Answer
AC
Araceli CarmonaMay 20, 2024
Final Answer :
B
Explanation :
Cash flows from operating activities includes cash inflows and outflows that are directly related to a company's regular operations, such as receipts from customers, payments to suppliers, and payment of interest on short-term notes payable. Receipts from the issuance of capital stock, payments for the purchase of investments, and payments for cash dividends are not considered operating activities.
Learning Objectives
- Comprehend the idea of cash movements originating from operations, investments, and financial transactions.
- Recognize the division of transactions in the statement of cash flows into categories like operating, investing, and financing activities.