1.
Which of the following is NOT an operating activity?
a. cash receipts for interest earned
b. cash collections from credit customers
c. cash payments for operating expenses
d. cash payments for dividends to stockholders
Explain.
Solution
Hi,
Please find the detailed answer as follows:
Option D (cash payments for dividends to stockholders) is the correct answer.
Explanation:
Cash Receipts for Interest Earned = Operating Activity (results in an increase in cash flow from
operating activity)
Cash Collections from Credit Customers = Operating Activity (results in an increase in cash flow
from operating activity)
Cash Payments for Operating Expenses = Operating Activity (results in a decrease in cash flow
from operating activity)
Thanks.