Preparation of the Statement of Cash Flows Does Not Involve

question 3

Multiple Choice

Preparation of the statement of cash flows does not involve:

• A)Computing the net increase or decrease in cash.
• B)Computing and reporting net cash provided or used by operations.
• C)Computing the profit compared to the net increase or decrease in cash.
• D)Computing and reporting net cash provided or used by financing activities.
• E)Computing and reporting net cash provided or used by investing activities.

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Definitions:

Annual Fixed Costs

The total of all business expenses that are constant and do not change with the level of goods or services produced within a given time period, typically a year.

Cash Break-Even

The point at which a business generates just enough cash flow to cover its operating expenses, not accounting for any profitability.

Selling Price

The amount of money a buyer pays to purchase a product or service.