Choose the Appropriate Letter to Match the Term and the Definition.Not

question 14

Essay

Choose the appropriate letter to match the term and the definition.Not all definitions will be used.
Term
1._____ Operating Activities
2._____ Indirect Method
3._____ Working Capital
4._____ Cash Equivalents
5._____ Investing Activities
6._____ Supplemental Disclosures
7._____ Direct Method
8._____ Financing Activities
Definition
A.Cash inflows and outflows related to components of net income.
B.Include assets that are very liquid and are purchased by the entity within three months of maturity.
C.These activities include only purchases made with borrowed funds.
D.Reports the components of cash flows from operating activities as gross receipts and gross payments.
E.This ratio uses net income instead of operating cash flow to analyze a company's ability to finance the cost of its debt.
F.Measures the ability of a company to finance its interest payments with its operating cash flow before taxes and interest.
G.A measure of the amount by which current assets exceed current liabilities.
H.These activities include money lent by a company as well as money borrowed by a company.
I.Must include cash paid for interest and income tax in a separate schedule.
J.Cash inflows and outflows related to the sale or purchase of investments and long-lived assets.
K.Cash inflows and outflows related to financing sources external to the company (owners and lenders).
L.Presents the operating activities section of the cash flow statement by adjusting net income to compute cash flows from operating activities.

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Definitions:

Negative Income Tax

A welfare system in which individuals earning below a certain income threshold receive supplemental pay from the government instead of paying taxes.

Labor Earnings

Income received by workers for their labor, including wages, salaries, bonuses, and other compensation.

Income Distribution

Income distribution describes how a nation’s total GDP is spread amongst its population, influencing the standard of living and economic inequalities.

Perfectly Equal Distribution

An ideal and theoretical state where all resources or income are distributed evenly among all members of a society.