Which of the following would be classified as an operating activity on a statement of cash flows?
A)Purchase of a building
B)Sale of another company's stock
C)Borrowing money through a promissory note
D)Payment of dividends
E)Purchase of inventory for cash

Question

Quizplus · Accepted Answer

Purchase of inventory for cash would be classified as an operating activity, as it relates to the day-to-day operations of the company. The other options would be classified as investing activities (purchase of a building, sale of another company's stock) or financing activities (borrowing money through a promissory note, payment of dividends).

Which of the Following Would Be Classified as an Operating