3 Questions
Which of the following activities is NOT included in cash flow from operating activities?
Purchase of new equipment
What is the primary focus of cash flow from operating activities?
Day-to-day operational activities of the business
How does an increase in accounts receivable affect cash flow from operating activities?
Decreases cash flow
Study Notes
Cash Flow from Operating Activities
- Financing activities, such as borrowing and repaying debt, are NOT included in cash flow from operating activities.
- The primary focus of cash flow from operating activities is to report a company's ability to generate cash from its core business operations.
- An increase in accounts receivable negatively affects cash flow from operating activities, as it represents a delay in receiving cash from customers.
Test your knowledge of cash flow from operating activities with this quiz. Explore the primary focus, included activities, and the impact of accounts receivable on cash flow from operating activities.
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