Asked by Jennifer Osorio on Jul 15, 2024
Verified
Which one of the following is an example of cash flows from operating activities?
A) Proceeds from collecting the principal amounts of loans.
B) Repayment of principals on loans.
C) Proceeds from the issuance of bonds and notes payable.
D) Payments to acquire equity securities of other companies.
E) Receipts of cash from sales.
Operating Activities
Transactions and other events that are not investing or financing activities which affect the net income of a company.
Cash Flows
The movement of money into and out of a business, project, or financial product.
Proceeds
The total amount of money received from a transaction, often used in the context of the sale of assets.
- Recognize examples of cash flows from operating activities.
Verified Answer
AF
Abigail FrancoisJul 18, 2024
Final Answer :
E
Explanation :
Receipts of cash from sales are an example of cash flows from operating activities, as they represent the cash generated from the main operations of the business. Options A and B are examples of cash flows from investing activities, as they represent the cash flows related to the acquisition and disposal of long-term assets. Option C is an example of cash flows from financing activities, as it represents the cash flows related to the borrowing of long-term funds. Option D is also an example of cash flows from investing activities, as it represents the cash flows related to the acquisition of equity securities of other companies.
Learning Objectives
- Recognize examples of cash flows from operating activities.
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