Question

Which of the following transactions will result in cash flows from operating activities?

• A. Cash receipts from sale of investments ₹ 60,000
• B. Cash receipts from sale of goods ₹ 94,000
• C. Dividend received ₹ 31,000
• D. Payment of cash for purchase of fixed assets ₹ 3,00,000

Hint:

Operating activities include cash flows from the core business transactions like cash receipts from customers and payments to suppliers. Cash flows from investments and financing activities are classified separately.

Answer 1

The Correct Option is B

Receipts and payments linked to primary business operations, such as cash from product or service sales, constitute cash flows from operating activities. This category is designated under operating activities within the cash flow statement.