Which of the following is operating activity?

Operating activities are the daily activities of a company involved in producing and selling its product, generating revenues, as well as general administrative and maintenance activities. Key operating activities for a company include manufacturing, sales, advertising, and marketing activities.

What are operating activities quizlet?

Operating Activity. An activity that directly affects an organization’s cash inflows and outflows, and determine its net income (aka costs and expenses)

What are operating activities in cash flow examples?

Examples of the direct method of cash flows from operating activities include:
  • Salaries paid out to employees.
  • Cash paid to vendors and suppliers.
  • Cash collected from customers.
  • Interest income and dividends received.
  • Income tax paid and interest paid.

Which of the following would not be considered an operating activity?

Payment of dividends would not be classified as an operating activity.

What are operating activities?

Operating activities are all the things a company does to bring its products and services to market on an ongoing basis. Non-operating activities are one-time events that may affect revenues, expenses or cash flow but fall outside of the company’s routine, core business.

What is an example of an investing activity?

Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets. … However, negative cash flow from investing activities might be due to significant amounts of cash being invested in the long-term health of the company, such as research and development.

What pre operating activities?

Common examples of pre-operating expenses include:

Recruitment and training of staff before opening. Market research. … Regulatory expenses (e.g. permits, licenses) Administrative expenses (e.g. office rental, stationery) Tuition for training programs, seminars, and other educational services.

Is depreciation an operating activity?

On the income statement, depreciation is usually shown as an indirect, operating expense. It is an allowable expense that reduces a company’s gross profit along with other indirect expenses like administrative and marketing costs.

Is Accounts Payable an operating activity?

Accounts payable fall under the “operating activities” section of the statement.

What are operating items?

Operating expenses include selling, general, and administrative expense (SG&A), depreciation, and amortization, and other operating expenses. Operating income excludes items such as investments in other firms (non-operating income), taxes, and interest expenses.

What is pre operating?

Pre-operating costs include any expenses incurred during the startup or formation of a new business. They include expenses related to the investigation of a potential new business, as well as the actual costs associated with forming or registering the company.

Why is operating activities important?

Operating activities generates the majority of the cash flows for the company as it is directly linked to the core business activities of the company like sales, distribution, production and so on, these activities also determine the profitability of the company and items categorized under this head are the primary …

Which of the following is an example of operating expenses?

The examples of the Operating expenses are legal fees, rent, depreciation, office equipment, and supplies, Accounting expenses, insurance, repairs and maintenance expenses, utility expenses like electricity, water, etc, telephone and internet expenses, property taxes, payroll tax expenses, pensions, advertisement …

How do you calculate operating activities?

Operating activities include generating revenue. Revenue (also referred to as Sales or Income), paying expenses, and funding working capital. It is calculated by taking a company’s (1) net income. While it is arrived at through, (2) adjusting for non-cash items, and (3) accounting for changes in working capital.

What are examples of operating income?

General & Administrative Expenses

Salaries or wages of Administrative staff; Rental expenses; Insurance expenses; office supplies and subscriptions expenses; consultancy services (for financial services, legal services, business promotional services, etc); Depreciation and Amortisation on Office Equipment’s, etc.

What are operating expenses and non-operating expenses?

Operating expenses are costs that a company must make to perform its operating activities — the primary activities that generate revenue. Non-operating expenses are costs that were not directly required for those activities.

How many types of operating expenses are their?

Different operating expenses accrued for a typical office may include accounting expenditures, insurance costs, payments for property taxes and utilities, repair and rental fees for non-production facilities, office supplies, and legal fees.

What are the 4 types of expenses?

You might think expenses are expenses. If the money’s going out, it’s an expense. But here at Fiscal Fitness, we like to think of your expenses in four distinct ways: fixed, recurring, non-recurring, and whammies (the worst kind of expense, by far).