Which of the Financial Statements Recognizes Only Transactions in Which

question 39

Multiple Choice

Which of the financial statements recognizes only transactions in which cash changes hands?

• A)Balance sheet
• B)Income statement
• C)Statement of cash flows
• D)Balance sheet and income statement

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Definitions:

Investment Allowance

Investment allowance is a tax incentive that allows businesses to deduct a certain percentage of their investment in assets from their taxable income.

Operating Revenue

Income generated from a company's core business activities, excluding income from investments or secondary sources.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of business, or legal jurisdiction.

Tax Effect

The impact of tax laws on the financial performance of a business, influencing its net income and cash flow.