Which of the Following Statements Is True Regarding the Multiple-Step

question 90

Multiple Choice

Which of the following statements is true regarding the multiple-step income statement?

• A)The multiple-step income statement is used only by companies that sell products,not those that provide services.
• B)The multiple-step income statement is helpful in determining a company's working capital.
• C)The multiple-step income statement reports the same net income as the single-step income statement.
• D)The multiple-step income statement is required under generally accepted accounting principles.

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Definitions:

Operating Cash Flow

The cash generated from the normal operating activities of a business, reflecting its ability to generate sufficient cash to fund its operations.

Variable Cost

Expenditures that fluctuate based on the volume of goods or services provided by a business.

Cash Break-Even

The point at which a company's cash inflows match its cash outflows, indicating no net gain or loss.

Fixed Costs

Costs that do not vary with the level of production or sales, remaining constant regardless of business activity levels.