The appropriate section in the statement of cash flows for reporting the cash payment of wages is:
A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash investing or financing activity.
E) None of these. This is not reported on the statement of cash flows.

Question

Quizplus · Accepted Answer

The payment of wages is a cost of running the business, which falls under operating activities. The statement of cash flows reports the inflows and outflows of cash from operating activities, investing activities, and financing activities. Therefore, the cash payment of wages will be reported under the operating activities section of the statement of cash flows.

The Appropriate Section in the Statement of Cash Flows for Reporting