Which of the three types of activities reported on the statement of cash flows is the most critical for a company's long-term survival?
A)Investing activities
B)Operating activities
C)Financing activities
D)Noncash investing and financing activities

Question

Quizplus · Accepted Answer

Operating activities are the most critical for a company's long-term survival because they involve the day-to-day operations that generate the company's cash inflows. Effective management of operating activities ensures that a company has a steady stream of cash to meet its ongoing financial obligations, such as paying suppliers, employees, and lenders. Investing and financing activities are important, but they are more focused on longer-term strategies, such as buying or selling assets, raising capital, or paying dividends. Noncash investing and financing activities are not as critical because they involve transactions that do not have an immediate impact on a company's cash flows.

Which of the Three Types of Activities Reported on the Statement