Which of the following cash flows would be included in the operating activities section of the statement of cash flows? Assume use of the direct method.
A)Cash received from a bond issue.
B)Cash paid to purchase equipment.
C)Cash receipts from dividends.
D)Cash gains and losses from the sale of operational assets.

Question

Quizplus · Accepted Answer

Cash receipts from dividends would be included in the operating activities section of the statement of cash flows. This is because dividends received by a company are considered to be a return on investment and are therefore included in operating cash flows. The other choices (A, B, and D) would be included in the financing or investing sections of the statement of cash flows, depending on the nature of the transaction.

Which of the Following Cash Flows Would Be Included in the Operating