Which of the following is not a cash outflows from operating activiti…

The correct answer is Option (3) → Cash payments to acquire fixed assets including intangibles and capitalised research and development.

Operating activities are the main revenue-producing activities of the enterprise, such as buying goods, paying staff and paying taxes. Buying fixed assets, tangible or intangible, is the acquisition of a long-term asset, which is an investing activity.

• Option (1) Cash payments to suppliers for goods and services. — An operating cash outflow. Buying goods and services is part of the main business of the enterprise.

• Option (2) Cash payments of income taxes unless they can be specifically identified with financing and investing activities. — An operating cash outflow. Income tax is paid on the profit from operations, so it is operating unless it can be tied to a financing or investing item.

• Option (4) Cash payments to and on behalf of the employees. — An operating cash outflow. Salaries and wages are day-to-day running costs of the business.