Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Which of the following is Not an Operating Activity?

Options:

Interest Received by finance company

Cash Revenue from operation

Dividend Received by Manufacturing Company

Amount Received from Debtors

Correct Answer:

Dividend Received by Manufacturing Company

Explanation:

The correct answer is Option (3) - Dividend Received by Manufacturing Company.

Dividend received is an investing activity rather than an operating activity. Operating activities involve the core business operations and transactions related to generating revenue whereas investing activities involve the acquisition and disposal of long-term assets, including investments in securities and dividends received from those investments.