The balance sheet accounts affected by operating activities are:
A) current assets and current liabilities.
B) retained earnings and long-term assets.
C) long-term assets and owner's equity.
D) long-term liabilities and long-term assets.

Question

Quizplus · Accepted Answer

Operating activities primarily impact a company's current assets (e.g. inventory, accounts receivable) and current liabilities (e.g. accounts payable, accrued expenses). Operating activities do not generally have a direct impact on long-term assets or owner's equity, nor do they typically involve long-term liabilities.

The Balance Sheet Accounts Affected by Operating Activities Are