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Answered

Which one of the following is representative of typical cash flows from operating activities?

Multiple Choice

Proceeds from collecting the principal amounts of loans.

Repayment of principals on loans.

Proceeds from the issuance of bonds and notes payable.

Payments by a merchandiser to acquire equity securities of other companies.

Receipts of cash sales.

Answer :

Receipts of cash sales is representative of typical cash flows from operating activities.

What Is Cash Flow From Operating Activities (CFO)?

The amount of money a business earns from ongoing, routine business operations, such as producing and selling products or offering clients a service, is known as cash flow from operating activities (CFO). It is shown as the first portion of the cash flow statement for a corporation.

Investment income and expense are not included in cash flow from operational activities or long-term capital expenditures. CFO, also known as operating cash flow (OCF) or net cash from operating activities, focuses exclusively on the core business.

The indirect method and the direct method are both ways to show cash from operating activities on a cash flow statement.

Learn more about cash flow:

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