Which of the Following Describes the Operating Activities Section of the Statement

question 152

Multiple Choice

Which of the following describes the operating activities section of the statement of cash flows?

• A)It reports cash receipts and cash payments that increase or decrease long-term assets.
• B)It includes cash inflows and outflows involved in long-term liabilities and equity.
• C)It reports on activities that create revenue or expenses for the entity's business.
• D)It reports on how cash flows affect the total assets and total liabilities.

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Definitions:

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true return on savings.

Nominal Interest Rate

The interest rate before adjustments for inflation, representing the face value of financial transactions.

Inflation Rate

The rise in the average cost of goods and services within an economy over a specific period, expressed as a percentage.