Question

In the statement of cash flows, which of the following would be classified as an operating cash flow?

1) Cash received from the sale of goods
2) Cash received from the issuance of debt
3) Cash received from the sale of property, plant, and equipment
4) Cash received from the payment of dividends

Answer 1

Cash received from the sale of goods would be classified as an operating cash flow in the statement of cash flows. Issuance of debt, sale of assets, and payment of dividends fall under financing and investing activities respectively.

Step-by-step explanation:

In the statement of cash flows, cash flows are classified into three main categories: operating activities, investing activities, and financing activities. The cash flow statement provides information on how a company generates and uses cash over a specific period. Cash received from operations typically includes everyday business activities such as the sale of goods or services, payment received from customers, as well as cash paid for supplies and employee services.

Answering the question, the option that would be classified as an operating cash flow is:

1. Cash received from the sale of goods

The other options listed are categorized as follows:

• Cash received from the issuance of debt - Financing activities
• Cash received from the sale of property, plant, and equipment - Investing activities
• Cash received from the payment of dividends - Financing activities