On the statement of cash flows, the cash flows from operating activities section include:
A)receipts from the issuance of capital stock.
B)receipts from the sale of investments.
C)payments for the acquisition of investments.
D)depreciation expense on fixed assets.

Question

Quizplus · Accepted Answer

Cash flows from operating activities include the changes in cash resulting from the primary operations of the business, such as the sale of goods or services, payments to suppliers, and operating expenses. Depreciation is a non-cash expense that reduces net income but doesn't involve any cash outlays. As a result, depreciation is added back to net income when calculating cash flows from operating activities. Receipts from the issuance of capital stock and the sale or acquisition of investments are classified as cash flows from financing and investing activities, respectively.

On the Statement of Cash Flows, the Cash Flows from Operating