Why Is the Operating Activities Section Often Believed to Be

question 116

Multiple Choice

Why is the operating activities section often believed to be the most important part of a statement of cash flows?

• A) It indicates a company's ability to generate cash from sales to meet current cash needs.
• B) It shows the net increase or decrease in cash during the period.
• C) It gives the most information about how operations have been financed.
• D) It shows the dividends that have been paid to shareholders.

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Definitions:

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, encouraging or discouraging certain behaviors.

Learning

The acquisition of knowledge or skills through experience, study, or being taught.

Learning

The process of acquiring knowledge, behaviors, skills, values, or preferences, often resulting from study, experience, or teaching.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.