Question : Which of the following transactions are classified or shown as Operating Activity?
Option 1: Purchase of machinery against payment.
Option 2: Dividend paid.
Option 3: Sale of car in cash.
Option 4: Cash received from sale of goods.
Answer (1)
23rd Jan, 2024
Correct Answer: Cash received from sale of goods.
Solution : Answer = cash received from the sale of goods.
Cash received from the sale of goods should be shown as operating activities because it represents revenue generated from the company's core business operations. The purchase of machinery, dividend paid, and sale of a car in cash are typically classified as investing or financing activities in the cash flow statement.
Hence, the correct option is 4.
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