38) The operating activities section of the statement of cash flows indicates: A

Question

38)

The operating activities section of the statement of cash flows indicates:

A. the revenues and expenses of the firm's operations after interest and tax.

B. the cash generated from revenues and expenses in all activities.

C. the cash generated from the company's main operating activities.

D. the revenues and expenses of the firm's operations before tax.

41)

Which of the following transactions would be recorded in the financing activities section of the statement of cash flows?

A. Cash paid for interest on a loan

B. Cash paid for rent

C. Cash paid as dividends

D. Cash paid to suppliers

Explanation / Answer

Answer to 38 is C

Operating activities shows the cash generated from principal revenue generated activities.

All other statements are incorrect.

Answer to 41 is A and C

Rent paid and payment made to suppliers are part of operating activities.

Dividend and interest paid is the rewards paid to fund providers therefore considered in financing activities

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