Which of the following would be considered a revenue stream?

• A. Sales of products to customers
• B. Purchase of office equipment
• C. Repayment of a bank loan
• D. Payment of employee salaries

Answer: (A)

Verified step by step guidance

1. Understand the concept of a revenue stream: A revenue stream refers to the income generated by a company from its normal business activities, typically through the sale of goods or services to customers.
2. Analyze each option provided in the problem: Determine whether each activity generates income or represents an expense or financial obligation.
3. Option 1 - Sales of products to customers: This activity involves selling goods or services, which directly generates income for the business. It is considered a revenue stream.
4. Option 2 - Purchase of office equipment: This activity involves spending money to acquire assets for the business. It is classified as an expense, not a revenue stream.
5. Option 3 - Repayment of a bank loan and Option 4 - Payment of employee salaries: Both activities involve outflows of cash to settle obligations or pay expenses, and neither generates income. Therefore, they are not revenue streams.