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Indicate to which business activity, operating activity, investing activity , or financing activity, each item relates.
a. Cash received from customers.
b. Cash paid to stockholders (dividends).
c. Cash received from issuing new common stock.
d. Cash paid to suppliers.
e. Cash paid to purchase a new office building.

Respuesta :

anthougo

The Indication of Business Activities are as follows:

Item    Description of Item                                           Business Activity

a. Cash received from customers.                              Operating Activity

b. Cash paid to stockholders (dividends).                   Financing Activity

c. Cash received from issuing new common stock.   Financing Activity

d. Cash paid to suppliers.                                             Operating Activity

e. Cash paid to purchase a new office building.         Investing Activity

Cash flows (outflows and inflows) from operating activities (OA) are generated from or spent on a company's regular or normal business activities or operations.

Cash flows (outflows and inflows) from investing activities (IA) are spent on or received from a company's investments, which yield returns in the future.

Cash flows (outflows and inflows) from financing activities (FA) are generated from or spent on debt, equity, and dividends payments to stockholders.

Thus, the above three activities are the main business activities of an entity.

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