Paying rent checked, Receiving dividends checked, Receiving interest checked are examples of cash flows relating to operating activities.
Cash inflows and outflows connected to net income components are referred to as cash flows from operating activities. Receiving dividends, interest payments, and cash from consumers are all examples of cash inflows from operating activities. Paying employees and wages, paying income taxes, paying interest, and buying services and products for resale are all examples of cash outflows from operating activities. Equipment acquisition is a form of investment.
Cash flow is crucial because it makes it possible for you to both fulfil your current financial responsibilities and make plans for the future. Cash flow, however, is a problem that many small firms face.
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