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Question
Which one is Cash Outflows from operating activities?
Options
Cash receipts from sale of goods and the rendering of services.
Cash receipts from royalties, fees, commissions and other revenues.
Cash payments to suppliers for goods and services
None of the above
MCQ
Solution
Cash payments to suppliers for goods and services
Explanation:
Cash Outflows from operating activities are:
- Cash payments to suppliers for goods and services.
- Cash payments to and on behalf of the employees.
- Cash payments to an insurance enterprise for premiums .and claims, annuities, and other policy benefits.
- Cash payments or refunds of income taxes unless they can be specifically identified with financing and investing activities
The net position is shown in case of operating cash flows.
Some transactions, such as the sale of a plant, may result in a gain or loss that is factored into the net profit or loss calculation.
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