Question

question 4 of 10: an example of operating activities in a cash flow statement includes:
a) purchase of factory building
b) collection of accounts receivable
c) repayment of loan
d) sale of stock

Explanation:

Operating activities in a cash flow statement involve cash flows from the main revenue - generating operations of a business. Collection of Accounts Receivable is related to the inflow of cash from sales made on credit, which is part of the core operating cycle (selling goods/services and collecting cash from customers).

• Option a (Purchase of factory building) is an investing activity as it involves the acquisition of a long - term asset.
• Option c (Repayment of loan) is a financing activity as it relates to the repayment of borrowed funds.
• Option d (Sale of stock) is also a financing activity as it involves raising capital through equity.

Answer:

b) Collection of Accounts Receivable