The following item would be classified as an operating activity on the statement of cash flows:
A)Payments for inventory.
B)Acquisitions of equipment.
C)Proceeds from borrowing.
D)Payments on loans.

Question

Quizplus · Accepted Answer

Payments for inventory are considered an operating activity as they are directly related to the production and sale of goods or services. Acquisitions of equipment are classified as investing activities, while proceeds from borrowing and payments on loans are classified as financing activities.

The Following Item Would Be Classified as an Operating Activity