Which balance sheet accounts are most affected by operating activities?
A)Current assets and current liabilities
B)Long-term assets
C)Long-term liabilities
D)Stockholders' equity

Question

Quizplus · Accepted Answer

Operating activities primarily involve the day-to-day business operations which lead to changes in current assets (such as accounts receivable, inventory, and prepaid expenses) and current liabilities (such as accounts payable, accrued expenses, and deferred revenue). These changes in current assets and liabilities are reflected in the balance sheet accounts and are therefore most affected by operating activities. Long-term assets, liabilities, and stockholders' equity are more affected by investing and financing activities.

Which Balance Sheet Accounts Are Most Affected by Operating Activities