Which of the following items is classified as part of 'operating activities' in the statement of cash flows?
A) Bad debts expense.
B) Depreciation of non-current assets.
C) Proceeds from the sale of non-current assets.
D) Payments to suppliers for the purchase of goods.

Question

Quizplus · Accepted Answer

Payments to suppliers for the purchase of goods are classified as part of operating activities in the statement of cash flows. This is because they relate to the day-to-day operations of the business and are necessary for generating revenue. A is classified as an adjustment to net income in the operating section, B is classified as an adjustment to net income in the non-operating section, and C is classified as part of investing activities in the statement of cash flows.

Which of the Following Items Is Classified as Part of 'Operating