Which of the following would not be classified as an operating activity?
A) Interest income
B) Income tax expense
C) Dividend income
D) Payment of dividends

Question

Quizplus · Accepted Answer

Operating activities include transactions and events that enter into the determination of net income. Interest income (A) and dividend income (C) are considered operating activities because they are part of the company's regular operations that affect net income. Income tax expense (B) is also an operating activity as it is directly related to the operations' profitability. Payment of dividends (D), however, is considered a financing activity because it involves the distribution of earnings to shareholders, not the company's core operations.

Which of the Following Would Not Be Classified as an Operating