BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
CASH RECEIPTS FROM ROYALTIES AND COMMISSIONS ARE:
A
CASH FLOWS FROM OPERATING ACTIVITIES
B
CASH FLOWS FROM INVESTING ACTIVITIES
C
CASH FLOWS FROM FINANCING ACTIVITIES
D
NOT REPORTED IN THE CASH FLOW STATEMENT
Explanation: 

Detailed explanation-1: -Cash receipts from the provision of services, royalties, and commissions are included in operating cash inflows.

Detailed explanation-2: -Following are some of the common examples of cash flows from operating activities. Examples of Inflows: Cash collected from customers against sale of goods or rendering of services. Cash collections from “other revenues” such as commissions, royalties, and fees.

Detailed explanation-3: -Operating activities will generally provide the majority of a company’s cash flow and largely determine whether it is profitable. Some common operating activities include cash receipts from goods sold, payments to employees, taxes, and payments to suppliers.

Detailed explanation-4: -Examples of operating activities are cash received and disbursed for product sales, royalties, commissions, fines, lawsuits, supplier and lender invoices, and payroll. Investing activities. These constitute payments made to acquire long-term assets, as well as cash received from their sale.

Detailed explanation-5: -Operating activities. include cash activities related to net income. For example, cash generated from the sale of goods (revenue) and cash paid for merchandise (expense) are operating activities because revenues and expenses are included in net income. Investing activities.

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