Gerald Company Has the Following Account Balances at the End

question 103

Multiple Choice

Gerald Company has the following account balances at the end of the first year of operations: What are total assets at the end of the first year?

• A)$36,000
• B)$94,000
• C)$118,000
• D)$221,000

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Definitions:

Indirect Method

A cash flow statement presentation method that adjusts net income for the changes in balance sheet accounts to calculate cash flow from operating activities.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, often referred to as the bottom line.

Statement of Cash Flows

A financial report showing the cash inflows and outflows from operating, investing, and financing activities of a company over a period.

Operating Activities

These involve the primary, day-to-day actions that generate revenue for a company, such as selling products or services.