Four of the Five Statements Below Contain a Stock and a Flow.Which

question 26

Multiple Choice

Four of the five statements below contain a stock and a flow.Which statement describes ONLY stock variables OR flow variables?

• A)The Transit Authority of Mytown collects $22 000 in fares per day and has an operating budget of $2 million per year.
• B)Country X spends an average of $1 million per year for flood relief and has an emergency services fund of $20 million.
• C)The Canadian Federal government has a debt of approximately $450 billion and an annual deficit of over $25 billion dollars.
• D)Nancy spends $400 per month on her credit card and has a balance owing of $2567.
• E)Chris earns $1500 per month and has $4000 in his savings account at the bank.

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Definitions:

Capital Expenditures

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.

Cash Dividends

Payments made by a corporation to its shareholders, representing a distribution of profits.

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to calculate operating cash flow.

Indirect Method

A financial reporting approach where increases and decreases in inventory, accounts payable, and accounts receivable are reflected in cash from operating activities.