Which one of the following is an example of cash flows from operating activities? Multiple Choice Proceeds from collecting the principal amounts of loans. Repayment of principals on loans. Proceeds from the issuance of bonds and notes payable. Payments to acquire equity securities of other companies. Receipts of cash from sales.

Operating activities in the cash flow statement refers to that statement in which the cash sales, cash payments are recorded. These transactions are recorded when the company use the direct method and for an indirect method the other things should be considered as changes in working capital, depreciation expenses, profit and loss on sales of fixed assets, etc

Therefore the last option is correct

chilljain33 chilljain33 · Answer 2 · 2021-12-31T07:48:48+01:00

The example of cash flows from operative activities in the query above is receipts of cash from sales. The correct option that matches with the statement above is E.

Cash flows from operating activities refers to as the cash that is either incoming or outgoing from the business organization from activities like sales, purchase, etc.

The cash flow of a business organisation refers to the net balance of monies received or sent/spent by such organization for the purpose of carrying the normal business activities.

The receipts and expenditures made in cash will account to cash flows and any accrued income or expense will not form a part of cash flows of an organization.

Receipts from sales in cash will amount to positive cash flow as it is assumed that the goods are sold by the firm at above the cost price of such goods.

Hence, the correct option is E that the receipts of cash from sales which is a normal business activity is an example of cash flow from operating activities.

To know more about cash flows, refer the link below.

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