Operating activities include
A) collection of accounts receivable.
B) purchases of plant and equipment for cash.
C) issuance of common stock.
D) payment of dividends to shareholders.

Question

Quizplus · Accepted Answer

Operating activities are the day-to-day activities involved in the production and sale of a company's products or services. Collection of accounts receivable is an example of an operating activity – it involves receiving payment from customers who owe the company money for products or services that have already been provided. Purchases of plant and equipment for cash, issuance of common stock, and payment of dividends to shareholders are not operating activities. Purchases of plant and equipment are investing activities, issuance of common stock is a financing activity, and payment of dividends to shareholders is also a financing activity.

Operating Activities Include