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

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BlackTom AI · Accepted Answer

First, let's restate the problem to ensure clarity: the question asks which cash flow category on the cash flow statement is related to the production of the firm’s goods or services. 
Option 1: cash flow from marketing activities. This would pertain to selling, general, and administrative activities related to marketing, not production, so it does not directly reflect the production of goods or services. 
Option 2: cash flow from operating activities. Operating activities include the core business functions that generate revenue, such as production (manufacturing) and delivery of goods or services, along with related expenses like costs of goods sold and working capital changes. This aligns with producing the firm’s goods or delivering its services. 
Option 3: cash flow from investment activities. Investment activities involve the acquisition or disposal of long-term assets (like property, plant, and equipment) and investments, not the day-to-day production of goods or services. 
Option 4: cash flow from financing activities. Financing activities relate to obtaining capital or repaying investors and lenders (debt, equity), rather than production processes. 
In summary, the production-related cash flows are captured under operating activities because they reflect the core business operations that generate revenue, including production costs and working capital movements. The other categories describe distinctly different aspects of a business: marketing-centric activities, capital investments, and financing arrangements, none of which directly represent production activity.

2025SU BSN 100 01 Quiz: Chapter14

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

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