Which one of the following should be classified as a cash flow from an operating

Question

Which one of the following should be classified as a cash flow from an operating activity on the statement of cash flows? A. The payment of cash for the purchase of additional equipment needed for current production. B. An increase in cash resulting from the issuance of previously authorized common stock. C. A decrease in accounts payable during the year. D. The payment of a cash dividend from money arising from current operations. Which one of the following should be classified as a cash flow from an operating activity on the statement of cash flows? A. The payment of cash for the purchase of additional equipment needed for current production. B. An increase in cash resulting from the issuance of previously authorized common stock. C. A decrease in accounts payable during the year. D. The payment of a cash dividend from money arising from current operations.

Explanation / Answer

A decrease in accounts payable during the year should be classified as a cash flow from an operating activity on the statement of cash flows Option C is correct

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