How would these items be classified in a cash flow statement prepared for a hairdressing franchise? i. Payment of $600 for hairdressing supplies
Ii) Takings from customers for the month
Iii) Capital paid into the business by the owner
A) i. investing outflow; ii. operating inflow; iii. financing inflow
B) i. operating outflow; ii. operating inflow; iii. does not appear in the cash flow statement
C) i. operating outflow; ii. operating inflow; iii. investing inflow
D) i. operating outflow; ii. operating inflow; iii. financing inflow

Question

Quizplus · Accepted Answer

Explanation: Payment for hairdressing supplies (i) is an operating outflow because it's a regular business expense. Takings from customers (ii) are an operating inflow as it's the primary revenue from business operations. Capital paid into the business by the owner (iii) is a financing inflow, as it involves funds being introduced to finance the business.

How Would These Items Be Classified in a Cash Flow