Question

An example of cash flow from operating activity is ______.

Options

• Purchase of own debenture

• Sale of fixed assets

• Interest paid on term deposits by a bank

• Issue of equity share capital

Answer 1

An example of cash flow from operating activity is interest paid on term deposits by a bank.

Explanation:

Interest paid on term deposits is an important part of a bank’s main business, so it is considered a cash flow from working activity. The other choices involve either spending money or obtaining funds for various activities.