On a statement of cash flows, which is NOT considered an operating activity?
A) Depreciation
B) Net income
C) Increase in inventory
D) Repayment of long-term debt

Question

Quizplus · Accepted Answer

Repayment of long-term debt is considered a financing activity, not an operating activity.

The other choices are considered operating activities: 
- Depreciation is a non-cash expense that is added back to net income to arrive at cash flow from operating activities. 
- Net income is an operating activity because it represents the profit or loss generated from the company's core business operations. 
- Increase in inventory is an operating activity because it represents an outflow of cash for the company to purchase inventory for sale.

On a Statement of Cash Flows, Which Is NOT Considered