Classify and give reasons for the cash flows falling under the operating activities
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Explanation:
Cash flows from operating activities is a section of a company's cash flow statement that explains the sources and uses of cash from ongoing regular business activities in a given period.
This typically includes net income from theincome statement, adjustments to net income, and changes in working capital.
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Cash flows falling under the operating activities
Explanation:
- Operating activities are considered to deal with revenue activities of the business and these activities are not considered as investing or financing activities of the enterprise.
- The amount of cash flows arising from the operating activities is useful for the operations of the business and have enough cash flows to deal with the operating needs of the enterprise.
- These activities are classified as payment of dividends, recoveries of loans, Receipts from royalties and commission; receipts for rendering services and payment to employees.
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Classify and give reasons for the cash flows falling under the operating activities
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