The fiNancial Statement That Summarizes the Sources and Uses of Cash

question 400

Multiple Choice

The financial statement that summarizes the sources and uses of cash over a specified period of time is the:

• A) Statement of comprehensive income.
• B) Statement of financial position.
• C) Tax reconciliation statement.
• D) Statement of cash flows.
• E) Statement of operating position.

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Definitions:

Not a Passive Activity

Activities that involve significant participation and management by the taxpayer, hence not qualifying for tax treatments as passive activities.

Business Loss

A financial state where business expenses exceed its revenue, which can affect tax liabilities.

Deduct

To subtract or take away from the gross amount; in taxation, to lower taxable income by subtracting allowable deductions.

At-risk Amount

The investment in money or other property at risk in an activity, determining the deductible loss limit.