Business Activities That Generate or Use Cash Are Classified as Operating

question 200

True/False

Business activities that generate or use cash are classified as operating, investing, or financing activities on the statement of cash flows.

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Definitions:

Total Assets

The sum of all assets owned by a company, including cash, investments, property, and equipment.

Current Liabilities

Financial obligations or debts a company owes and is expected to pay within a year or within the operating cycle.

Return on Net Sales

A financial ratio indicating the efficiency of a company in generating profit from its net sales, usually expressed as a percentage.

Net Income Before Taxes

Total revenue minus total expenses, excluding tax expenses.