The Conceptual Framework for Free Cash Flows Separates All Assets

question 39

Multiple Choice

The conceptual framework for free cash flows separates all assets and liabilities into the following categories:

• A) Current and non-current
• B) Monetary and non-monetary
• C) Operating and non-operating
• D) Operating and financial

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Definitions:

Current Ratio

A liquidity ratio that measures a company's capacity to pay off its short-term liabilities with its short-term assets.

Total Assets

The sum of all assets owned by a company, including both current and non-current assets, as recorded on the balance sheet.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, essentially representing the owners’ equity.

Note Receivable

A written promise for the amounts to be received, typically recording a receivable where the individual or entity promises to pay a sum of money at a future date.