The First Line Item in the Operating Activities Section of a Spreadsheet

question 201

Multiple Choice

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

• A)Cash.
• B)Cash received from customers.
• C)Increase (decrease)in accounts receivable.
• D)Net income (loss).
• E)Adjustments to net income.

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Definitions:

Market Price

The present cost at which a service or asset is available for purchase or sale on the public market.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specific time.

Strike Price

The set price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying security or commodity.

Market Price

The going rate for which a commodity or service can be traded or acquired in the market.