What Is the Starting Point for Calculating Cash Flows from Operations

question 96

Multiple Choice

What is the starting point for calculating cash flows from operations when the indirect method is used?

• A) Find net income on the income statement.
• B) Calculate the net change in the cash account.
• C) Add the change in accounts receivable to sales revenue.
• D) Identify the balance sheet accounts that relate to operating activities.

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Definitions:

Consumer Staples

Essential products that consumers continue to demand regardless of economic conditions, such as food, beverages, and household goods.

Specialty Goods

High-value products that are unique or considered luxury items, often requiring a specific purchasing effort by consumers.

Cannibalized

When a new product or service significantly reduces the sales, market share, or demand of an existing product within the same company.

Existing Brands

Brands that have been established in the market over time and have developed awareness, loyalty, and identity among consumers.