Which of the Following Statements Regarding the Statement of Cash

question 6

Multiple Choice

Which of the following statements regarding the statement of cash flows is true?

• A) The statement of cash flows analyzes the change in cash.
• B) The statement of cash flows is organized to present classifications for total cash inflows and not cash outflows.
• C) The statement of cash flows analyzes only the changes in current assets and current liabilities.
• D) The statement of cash flows is an optional financial statement.

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Definitions:

Additional Income

Income that is received in addition to the primary source of income, such as earnings from side jobs or investments.

Permanent Increase

A long-term or indefinite rise in the level or amount of something, such as income, output, or investments.

Federal Budget Deficits

Occurs when a government's total expenditures exceed the revenue that it generates, excluding debt from previous years.

Discretionary Fiscal Policy

Discretionary fiscal policy involves government actions to influence economic activity through changes in taxation and spending policies, distinct from automatic fiscal stabilizers.