Which of the following cash flows results from an operating activity?
A)Paying dividends to stockholders
B)Repaying note payable
C)Receiving interest on investment
D)Purchasing equipment

Question

Quizplus · Accepted Answer

Receiving interest on investment is a cash flow resulting from an operating activity, as it represents earnings from the company's normal business operations. Paying dividends to stockholders is a cash flow resulting from a financing activity, as it is an outflow of cash to owners of the company. Repaying note payable is a cash flow resulting from a financing activity, as it represents a reduction in the company's borrowings. Purchasing equipment is a cash flow resulting from an investing activity, as it represents an investment in capital assets.

Which of the Following Cash Flows Results from an Operating