Question

What are operating activities? A. Revenue and expenses involved in running a business B. Cash transactions related to the company's financial investments C. Transactions that bring cash in and out based on borrowing and lending D. The ways a company tracks and distributes dividends

Answer 1

Answer:

A. Revenue and expenses involved in running a business

Explanation:

A financial statement can be defined as a written report used by financial experts or accountants to quantitatively describes the financial health of a company. Under the financial statements is a cash-flow statement, which is used to record the cash inflow and cash equivalents leaving a business firm.

Cash flow statement, also known as the statement of cash flows, contains financial information about operating, financial and investing activities.

Operating activities in the statement of cash-flow of a business firm gives a detailed description of the out-flow and in-flow of cash from liabilities and current assets account. Thus, all the net income or cash from all operational business activities of a company is recorded as operating activities.

Hence, operating activities can be defined as revenue and expenses involved in running a business.

Some examples of operating activities are cash paid as an expense for merchandise, cash revenue generated from the sales of finished goods etc.