Preparation of the Statement of Cash Flows Involves

question 2

Multiple Choice

Preparation of the statement of cash flows involves:

• A) Calculation and reporting of net cash provided or used by investing activities.
• B) Calculation and reporting of net cash provided or used by operating activities.
• C) Calculation and reporting of net cash provided or used by financing activities.
• D) Calculation of the net increase or decrease in cash.
• E) All of these answers are correct.

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Definitions:

Acceptable Price

The price level at which a buyer views the cost of a product or service as reasonable, taking quality and utility into account.

Willing To Pay

Willing to pay is the maximum amount that a consumer is prepared to spend on a good or service.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a product versus what they actually receive in the market.