Practicing Success
Claims received from Insurance Companies for loss of goods are treated as: |
Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities None of the above |
Cash Flow from Operating Activities |
The correct answer is option 1- Cash Flow from Operating Activities. Claims received from insurance companies for loss of goods are related to the core operations of the business and are typically considered as part of the operating activities when preparing the Cash Flow Statement. These claims represent compensation for losses incurred during the normal course of business operations, which aligns with the operating activities of the enterprise. |