Payment of income tax is a cash outflow from activity.

income

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investing

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financing

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operating

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Solution

The correct option is D operating
Payment of income tax is a cash outflow from operating activity. Income tax is paid on the profits. Most often, the profits in a business is a result of the operating activity. So, income tax is an operating activity outflow.

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Similar questions

Q. Cash payments for income taxes are included on the statement of cash flows as ______________.

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Q. ______ is the personal income minus personal income tax and miscellaneous payments to government.

Prepare Provision for Income Tax Account from the following informations for preparing Cash Flow Statements:
$\begin{matrix} Particulars & 31 - 03 - 2016 & 31 - 03 - 2017 Rs. & Rs. Provision for Income Tax & 3, 20, 000 & 4, 00, 000 \end{matrix}$

Additional Information:
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Payment of income tax is a cash outflow from activity.

The correct option is D operatingPayment of income tax is a cash outflow from operating activity. Income tax is paid on the profits. Most often, the profits in a business is a result of the operating activity. So, income tax is an operating activity outflow.

The correct option is D operating
Payment of income tax is a cash outflow from operating activity. Income tax is paid on the profits. Most often, the profits in a business is a result of the operating activity. So, income tax is an operating activity outflow.