Preparing the Financing Activities Section of the Statement of Cash

question 61

True/False

Preparing the financing activities section of the statement of cash flows requires the analysis of non-current liability and equity accounts, as well as any short-term loans incurred for lending purposes rather than trade.

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Definitions:

Disposable Income

The amount of money individuals or households have available for spending and saving after income taxes have been deducted.

Consumption

The use of goods and services by households that leads to a decrease in their availability.

Disposable Income

Available financial merits for households towards spending and saving following income tax subtractions.

MPC

Marginal Propensity to Consume, which is the proportion of any additional income that is spent on consumption rather than being saved.