Which of the Following Is an Accurate Statement Regarding a Statement

question 45

Multiple Choice

Which of the following is an accurate statement regarding a statement of cash flows?

• A)Only cash items that affect the income statement are included.
• B)Only material cash items that affect the income statement are included.
• C)All material operating, investing, and financing activities are included.
• D)Immaterial financing activities that affect cash do not need to be included.

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Definitions:

Marginal Propensity

The tendency of an individual or household to spend an additional dollar of income on consuming goods and services.

Simple Spending Multiplier

The ratio of a change in output to a change in autonomous spending that caused it, illustrating the impact of fiscal policy on total economic output.

Simple Spending Multiplier

A formula used in economics to determine the impact of a change in autonomous spending on the aggregate output, highlighting the amplification of initial spending through the economy.

Marginal Propensity

The ratio of change in an economic variable (such as consumption or saving) in response to a change in another (such as income), indicating the responsiveness of the variable.