Operating activities are most closely related to: A- long term assets B- current

Question

Operating activities are most closely related to: A- long term assets B- current assets and current liabilities C- long term liabilities and owner's equity D- dividends and treasury stock E- none of the above answers is correct Operating activities are most closely related to: A- long term assets B- current assets and current liabilities C- long term liabilities and owner's equity D- dividends and treasury stock E- none of the above answers is correct A- long term assets B- current assets and current liabilities C- long term liabilities and owner's equity D- dividends and treasury stock E- none of the above answers is correct

Explanation / Answer

Operating activities are most closely related to current assets and current liabilities.

To calculate cash flow from operating activities we add decrease in current assets and increase in current liabilities and subtract increase in current assets and decrease in current liabilities. So Operating activities are related to current assets and current liabilities.

So correct answer is B) current assets and current liabilities

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