'Purchase of inventory for cash' is which type of activity in the cash flow statement?
Options:
Operating activity
Investing activity
Financing activity
None of these
Correct Answer:
Operating activity
Explanation:
Cash Outflows from operating activities- Cash payments to suppliers for goods and services. Cash payments to and on behalf of the employees. Cash payments to an insurance enterprise for premiums and claims, annuities, and other policy benefits. Cash payments of income taxes unless they can be specifically identified with financing and investing activities.