Which of the following will be categorized as an operating activity on the statement of cash flows?
A) Cash received by selling old equipment
B) Cash paid for purchase of new machinery
C) Cash paid to employees
D) Cash received from issuance of shares of common stock

Question

Quizplus · Accepted Answer

Cash paid to employees is an operating expense and therefore, an operating activity that should be included in the statement of cash flows.

Option A would be categorized as investing activity and option B would be categorized as investing or financing activity depending on the nature of the machinery. Option D would be categorized as financing activity.

Which of the Following Will Be Categorized as an Operating