Cash flows related to day to day activities of a business are referred to, on a Cash Flow Statement, as

Question

BlackTom AI · Accepted Answer

The question asks: Cash flows related to day to day activities of a business are referred to, on a Cash Flow Statement, as

In a typical Cash Flow Statement, cash flows are categorized into three broad activities: operating activities (day-to-day core business operations), investing activities (purchase/sale of long-term assets and investments), and financing activities (issuance/repayment of debt and equity).

Option availability note: The provided data shows only one answer: 'a. operating activities.' but there are no additional answer options listed for comparison. This limits the ability to evaluate alternative distractors such as investing activities or financing activities.

Nevertheless, the concept itself can be explained. Operating activities encompass cash inflows and outflows from the primary revenue-generating activities of the business, including receipts from customers, payments to suppliers, payments for operating expenses, and other cash flows that are part of normal business operations. These are distinct from investing activities, which involve long-term assets, and financing activities, which involve capital structure changes.

If a student encounters options that claim:
- Investing activities relate to day-to-day operations: this would be incorrect because investing deals with long-term assets, not routine operations.
- Financing activities relate to day-to-day cash flows: this would also be incorrect because financing pertains to borrowing, repaying debt, issuing stock, and other financing transactions.

In summary, the correct conceptual grouping for day-to-day operating cash flows is operating activities, while the absence of additional options means we cannot critique each alternative choice here. The core takeaway is that operating activities reflect the core business’s regular cash receipts and payments, as opposed to the other two categories that cover non-operational cash movements.

Cash flows related to day to day activities of a business are referred to, on a Cash Flow Statement, as

View Explanation

Log in for full answers

Similar Questions

JGMH Inc. sold a piece of equipment during the period for $230,000 and recorded a gain of $45,000 on the sale. How should this gain be treated when preparing the operating activities section of the statement of cash flows using the indirect method?

On the cash flows statement, which of the following is related to the production of the firm’s goods or services?

Cash flows related to day to day activities of a business are referred to, on a Cash Flow Statement, as

Paying property taxes is which type of business activity?

Operating activities consist of:

One factor of importance of the Cash Flow Statement to the Product Manager is tracking whether there is enough cash available to fund product development or innovation projects. The section of the Cash Flow Statement that would give the Product Manager these incites is:

How would Interest Paid be classified in a Cash Flow Statement?

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler