Which of the following is not an operating activity?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Proceeds from sale of old machinery.
-
Operating activities are the principal revenue-generating activities of a business — they include all cash flows related to day-to-day operations.
Examples:-
Cash receipts from customers
-
Payments to suppliers or employees
-
Operating expenses (selling, distribution, etc.)
-
-
Proceeds from sale of old machinery are not part of normal operations; they are related to the disposal of a fixed asset, which is a non-operating / investing activity.