Which of the Following Financial Statements Is Divided into Major

question 127

Multiple Choice

Which of the following financial statements is divided into major categories of operating, investing, and financing activities?

• A)The income statement
• B)The balance sheet
• C)The retained earnings statement
• D)The statement of cash flows

---

Definitions:

Adjustment Costs

Expenses incurred in the process of modifying a business operation or strategy, including restructuring or equipment changes.

Transaction Motive

The need to hold cash for the purpose of conducting day-to-day business operations.

Float Management

The practice of managing the time difference between the writing of a check and its clearing at the bank, aiming to optimize the use of available funds.

Small Firm

A business with a limited number of employees and revenue, often defined within specific legal frameworks based on the industry.