Why Is the Operating Activities Section of the Statement of Cash

question 64

Multiple Choice

Why is the operating activities section of the statement of cash flows often believed to be the most important part of the statement?

• A) Because it shows the dividends that have been paid to stockholders.
• B) Because it indicates a company's ability to generate cash from sales to meet current cash payments for goods or services.
• C) Because shows the net increase or decrease in cash during the period.
• D) Because it gives the most information about how operations have been financed.

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Definitions:

Parsons's Functionalism

A sociological theory developed by Talcott Parsons, positing that society is a complex system whose parts work together to promote solidarity and stability.

Social System

A complex network of relationships, institutions, norms, and practices that work together to fulfill society's needs and maintain order.

Chilly Climate

A term used to describe an environment, often academic or workplace, that is unwelcoming and marginalizes certain groups.

Higher Education

Post-secondary education provided by universities and colleges that leads to an academic degree or professional qualification.