Which of the following is a cash flow from operating activities?
A) Sale of long-term investments in common stock.
B) Purchase of merchandise for resale.
C) Payment of a note payable.
D) Sale of a piece of land no longer used in operations.

Question

Which of the following is a cash flow from operating activities? 
A) Sale of long-term investments in common stock.
B) Purchase of merchandise for resale.
C) Payment of a note payable.
D) Sale of a piece of land no longer used in operations.

Quizplus · Accepted Answer

Purchase of merchandise for resale is a cash outflow related to the company's primary business operations, which makes it a cash flow from operating activities. A, C, and D are cash flows from investing or financing activities. Sale of long-term investments in common stock and sale of a piece of land no longer used in operations are both examples of cash inflows from investing activities, while payment of a note payable is a cash outflow from financing activities.

Which of the Following Is a Cash Flow from Operating