In a Classified Statement of fiNancial Position Which of the Following

question 139

Multiple Choice

In a classified statement of financial position which of the following is NOT true

• A) The asset and liability sections are divided into short-term and long-term sections.
• B) The long-term assets and liabilities are presented before the short- term assets and liabilities.
• C) Shareholders' equity is made up of retained earnings and share capital.
• D) The current assets are listed in order of liquidity.

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Definitions:

Operating Activities

Financial transactions and events related to the core business functions, including revenue and expense activities.

Indirect Method

A cash flow statement presentation method that adjusts net income for the changes in balance sheet accounts to calculate cash flow from operating activities.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, often referred to as the bottom line.

Statement of Cash Flows

A financial report showing the cash inflows and outflows from operating, investing, and financing activities of a company over a period.