Which of the following will be categorized as an operating activity on the statement of cash flows?
A)cash received by selling old equipment
B)cash paid for purchase of new machinery
C)cash paid for purchase of raw materials
D)cash received from issue of shares

Question

Quizplus · Accepted Answer

Cash paid for purchase of raw materials is an operating activity since it is directly related to the company's primary business operations.

Answer: A and B
 Cash received by selling old equipment and cash paid for purchase of new machinery are both classified as investing activities since they involve the acquisition and disposal of long-term assets.

Answer: D
 Cash received from the issue of shares is classified as a financing activity as it represents money received from investors as capital.

Which of the Following Will Be Categorized as an Operating