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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Cash inflows from operating activities come from

  1. a. payment for raw materials.
  2. b. gains on the sale of operating equipment.
  3. c. collection of sales revenues.
  4. d. issuing capital stock.
  5. e. issuing bonds.

To determine

Identify the option which states the cash inflows obtained from the operating activities.

Explanation

Cash Flows from Operating Activities:

This is the first category of a cash flow statement in which the operational and profit generating activities in a firm are shown. The operating cash flows increase or decrease the current assets and current liabilities of a firm.

c.

Cash inflows from operating activities come from the collection of sales revenue. With the revenue obtained from the sale, the cash comes in a company. Therefore, this option is correct.

a.

The payment for raw materials is a cash payment made by the company. The cash inflow from operating activities does not come from the payment as it is a cash outflow...

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