Question

Which of the following is included in operating activities?

a.An increase in equity
b.An increase in accounts receivable
c.An increase in long-term debt
d.All of these choices are correct. g

Answer 1

b. An increase in accounts receivable

Step-by-step explanation:

A: Equity is not an operating activities. It is a financing of a company. Therefore, increasing in equity cannot be the right choice.

C: Receive from long-term debt and paying to long-term debt are financing activities, therefore, it cannot be the answer.

B: Operating activities are day-to-day activities. And, collection from accounts receivable is a day-to-day activities for a firm. Hence, it is correct option.

Therefore, Increase in accounts receivable is the answer.