Which of the Following Statements Is Correct

question 51

Multiple Choice

Which of the following statements is correct?

• A) The statement of cash flows should include changes in summary accounts,such as current assets and current liabilities,as well as changes in all individual accounts.
• B) If a firm sells equity to reduce long-term bonds,this is a capital financing transaction and does not appear on the statement of cash flows.However,if the firm sells equity in order to purchase assets,this transaction would be included in the statement of cash flows.
• C) Net income is normally the firm's primary operating cash flow,but changes in accounts payable,accounts receivable,inventories and accruals are also classified as operating cash flows.
• D) Each change on the balance sheet results from one of two types of transactions,either financing activities,such as issuing or retiring new stock or debt,or long-term investment,such as buying and selling assets.
• E) The change in the firm's liquidity position is measured by how much greater a firm's sources of funds are than its uses of funds.

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Definitions:

Gender-neutral

Pertains to language or practices that avoid distinguishing roles or attributes according to people's sex or gender, promoting equality.

Ethnocentrism

Refers to a tendency to regard one’s own culture and group as the standard, and thus superior, whereas all other groups are seen as inferior.

Italian Culture

The customs, traditions, arts, history, and social norms originating from or associated with Italy and its inhabitants.

Superior

A quality or state of being higher in rank, status, quality, or power compared to something else.