Question

How many of the following transactions would affect operating cash flows reported in the statement of cash flows (all transaction involve cash)?

Borrowed $50,000 from the bank
Purchased $12,000 in supplies
Provide services to customers for $27,000
Paid the utility bill of $750
Purchased a delivery truck for $12,000
Received $25,000 from issuing common stock

Answer 1

Answer: Purchased $12,000 in supplies

Provide services to customers for $27,000

Paid the utility bill of $750

Explanation: The accounting items that affect the operating cash flow of a company are those related to the business, that is, without them, the business would not carry out its activities.

These operating items are those of the income statement, excluding the effect of items that do not affect the cash as depreciation and amortization.

Operating cash flows also includes balance sheet items that are related to operations, such as accounts receivable and payable.