An Entity That Purchases and Sells Securities on Its Own

question 185

Multiple Choice

An entity that purchases and sells securities on its own behalf is acting as:

• A) A broker
• B) A dealer
• C) An agent
• D) A principal

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Definitions:

Net Income

The total profit or loss of a company after all revenues and expenses have been accounted for, also known as net earnings.

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for non-cash transactions and changes in working capital to calculate net cash from operating activities.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of an entity, typically involving the inflow of cash from investors or banks.

Indirect Method

A technique used in the statement of cash flows to adjust net income for the effects of non-cash transactions and changes in working capital to determine cash flow from operating activities.