When a Firm's Expenses Are Greater Than Its Sales Revenue

question 69

Multiple Choice

When a firm's expenses are greater than its sales revenue, the firm has a _____.

• A) profit
• B) loss
• C) negative cash flow
• D) planned economy
• E) market economy

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Definitions:

Direct Method

A cash flow statement reporting approach that lists major operating cash receipts and payments during a period.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflow and outflow a company receives from its ongoing operations and external investment sources.

Operating Activities

Involves the day-to-day actions that are taken for the main operations of a business, such as sales and purchase of goods or services, which are reflected in the cash flow from operating activities in the financial statements.

Comparative Balance Sheet

A financial statement that presents the balances of assets, liabilities, and stockholders' equity at two or more different points in time to analyze trends or changes.