Which of the following is a key component of cash flow from operating activities?

Prepare for the DECA Accounting Applications Exam. Utilize flashcards and multiple choice questions with hints and explanations. Start studying now!

Cash receipts from customers represent the inflows of cash received from selling goods or services, which is a primary aspect of a company's operating activities. Operating activities are the core functions of a business, focusing on the income generated from regular business operations. These cash flows are critical for determining the overall health and profitability of a company.

In contrast, cash outflows for new investments relate to capital expenditures and do not reflect everyday operational cash flow. Contributions from owners pertain to equity financing, which is not a part of operating activities. Proceeds from loans taken represent financing activities, where cash inflow comes from borrowing rather than from operations. All of these components play a role in cash management but only cash receipts from customers directly measure the effectiveness of a company's core operations.

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