When preparing the statement of cash flows, companies are required to report separately as operating cash flows all of the following except

Answer (D) is correct. In general, the cash flows from transactions and other events that enter into the determination of income are to be classified as operating. Cash receipts from sales of goods and services, from interest on loans, and from dividends on equity securities are from operating activities. Cash payments to suppliers for inventory; to employees for wages; to other suppliers and employees for other goods and services; to governments for taxes, duties, fines, and fees; and to lenders for interest are also from operating activities. However, distributions to owners (cash dividends on a company’s own stock) are cash flows from financing, not operating, activities.