Which of the following is not a cash flow from operating activities (in reference to a non-financing company)?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Cash received in the form of dividend.
Cash received in the form of dividend is a investing activity.
Operating activities are the activities that constitute the primary or main activities of an enterprise. For example, for a company manufacturing garments, operating activities are procurement of raw material, incurrence of manufacturing expenses, sale of garments, etc. These are the principal revenue generating activities (or the main activities) of the enterprise and these activities are not investing or financing activities.
Cash Inflows from operating activities-
- cash receipts from sale of goods and the rendering of services.
- cash receipts from royalties, fees, commissions and other revenues.