In the statement of cash flows, the purchase of supplies is classified as:
A) Operating activities.
B) Financing activities.
C) Investing activities.
D) None of the above.

Question

Quizplus · Accepted Answer

The purchase of supplies is considered an operating expense and is therefore classified under operating activities in the statement of cash flows. This is because supplies are essential for the day-to-day operations of the business, and their purchase is directly related to the generation of revenue.

In the Statement of Cash Flows, the Purchase of Supplies