Chapter 13, Problem 1QC

(Learning Objective 1) Which of the following is not one of the activities found on the statement of cash flows?

1. a. Administrative activities
2. b. Financing activities
3. c. Investing activities
4. d. Operating activities

To determine

To identify: The activity which is not one of the activities found on the statement of cash flows.

Answer to Problem 1QC

Option a. The activities which are not one of the activities found on the statement of cash flows are administrative activities.

Explanation of Solution

a.

Administrative activities: This is the correct option because administrative activities are not taken into account while preparing the cash flow statement. The cash flow statement includes operating, investing and financing activities only.

b.

Financing activities: The activities which are associated with the issuance of shares, payment of loans are termed as financing activities. These activities are a part of the cash flow statement. Thus, this option is incorrect.

c.

Investing activities: This option is incorrect as the investing activities are not among those activities which are not included in cash flow statement. Investing activities deal with the sale and purchase of the fixed assets of the company and these are part of cash flow statement.

d.

Operating activities: The activities which involve the day to day operations like sale and purchase of goods or rendering of services are inculcated in operating activities. Operating activities are primarily included while making the statement of cash flows. Thus, this option is incorrect.