Identify the Operating Activity for a trading organisation.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) - Sale of goods.
Sale of goods is an operating activity.
* Sale of goods- It is an operating activity. Sale of goods by a trading organisation is daily routine activities of trading concern that's why it is an operating activity.
OTHER OPTIONS
* Payment of Dividend- It is a financing activity. A company raise funds by issuing shares which is a financing activity and paying dividend to those shareholders is also a financing activity.
* Receipt of Dividend- It is an investing activity. A company invest in the shares of other companies for the capital appreciation and dividend so it is an investing activity.
* Issue of shares- It is a financing activity. Trading concern raise funds by issuing securities to public.