Which of the following is not an operating activity?

The correct answer is Option (4) → Proceeds from sale of old machinery.

Operating activities are the main revenue-earning activities of the business: selling goods, collecting from customers and paying the expenses of running the business. Machinery is a fixed asset, and cash received from its sale is an inflow from investing activities.

Option (1) Cash revenue from operations. — An operating activity. It is cash received from the sale of goods and services.

Option (2) Cash receipt from trade receivables — An operating activity. Collections from customers are cash from sales made on credit.

Option (3) Selling and distribution expenses paid. — An operating activity. It is a payment for services needed to run the main business.