When Preparing the Statement of Cash Flows for the Proprietary

question 126

Multiple Choice

When preparing the Statement of Cash Flows for the Proprietary Fund,cash flows from noncapital financing activities include all of the following EXCEPT:

• A) Receipts from customers.
• B) Proceeds and repayment of debt not clearly related to capital outlay.
• C) Grants received from and paid to other governments for noncapital purposes.
• D) Transfers to and from other funds.

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Definitions:

Current Assets

Resources anticipated to be turned into cash, sold, or used up within a year or throughout the typical operating cycle of the company.

Net Sales

Total sales revenue minus returns, allowances, and discounts.

Gross Profit

Gross profit refers to the difference between revenue and the cost of goods sold before administrative, overhead, and other expenses.

Receivables Turnover Ratio

A financial metric that measures a company's effectiveness in extending credit and collecting debts, calculated by dividing net credit sales by the average accounts receivable.