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4 Which is an example of a cash flow from an operating activity? (a) Payment of cash to lenders for interest. (b) Receipt of
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Answer #1

Question 4

Correct answer-----------(a) payment of cash to lenders for interest.

Payment to lenders for their loan repayment is cash flow from investing activities but interest payment is an operating cash outflow.

Question 5

Correct answer-----------(c) Receipt of cash from sale of equipment.

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Sale and purchase of equipment or any other fixed asset or investment is considered as investing activity.

Payment to supplier is an operating activity whereas purchase of capital stock and issuance of stock are financing activities.

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