A Decreasing Long-Term Liability Account Is Presented on the Statement

question 16

Multiple Choice

A decreasing long-term liability account is presented on the statement of cash flows as

• A)a decrease in cash in the Financing Activities category.
• B)a decrease in cash in the Investing Activities category.
• C)an increase in cash in the Operating Activities category.
• D)an increase in cash in the Financing Activities category.

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Definitions:

Exercise Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset.

Split Factor

A term used in finance to describe the ratio by which a company's existing shares are divided into a larger number of shares, affecting a stock's price by making it more affordable without changing the company's market capitalization.

American Call Option

A type of call option that can be exercised at any time up to the expiration date, giving the holder the right to buy the underlying security at the strike price.

Exercise Price

The cost at which an option's holder has the right to purchase or sell the asset underlying the option.