On the Statement of Cash Flows, Direct Method, Which of the Following

question 51

Multiple Choice

On the Statement of Cash Flows, direct method, which of the following is a cash inflow from an operating activity?

• A) Payment to the bank for a loan
• B) Collection of an Accounts Receivable
• C) Payment to buy a piece of equipment
• D) Paying dividends to stockholders

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Definitions:

Cash Requirements

Cash requirements refer to the total amount of cash a company needs to satisfy its operational expenses and financial obligations in a given period.

Long-Term Debt

Loans and financial obligations lasting more than one year, used as a means for business financing.

Corporate Ownership

Refers to the ownership of shares in a corporation, which represents claims on the corporation's assets and earnings.

Ability To Raise Capital

The capacity of a company to secure funds for its operations, growth, or to meet financial obligations, through debt, equity, or other financial instruments.