To Which of the Following Is the Operating Activities Section

question 35

Multiple Choice

To which of the following is the operating activities section of the statement of cash flows prepared using the direct method most similar?

• A)The balance sheet
• B)An income statement converted to the accrual basis of accounting
• C)An income statement converted to the cash basis of accounting
• D)A bank reconciliation

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Definitions:

Intangible Assets

Non-physical assets such as patents, trademarks, and copyrights that have value to a business.

Classified Balance Sheet

A balance sheet that organizes assets and liabilities into subcategories like current, long-term, property, plant, and equipment, to provide more detailed information.

Current Ratio

It's a financial ratio that calculates whether a corporation can cover its obligations that need to be paid within one year, by dividing the current assets by the current liabilities.

Plant Assets

Tangible assets that are used in the operations of a business and are not intended for resale, including buildings, machinery, and equipment.