The Only Part That Differs in a Cash Flow Statement

question 55

Multiple Choice

The only part that differs in a cash flow statement using the direct method from one using the indirect method is the:

• A)non-cash investing and financing activities section.
• B)investing activities section.
• C)operating activities section.
• D)financing activities section.

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Definitions:

Marginal Cost

The additional total expense that results from the creation of one more unit of a product or service.

Monopoly Power

The ability of a single seller to control prices and total market supply in an industry.

Social Cost

The total cost to society, including both private costs borne by individuals and external costs affecting others not directly involved in a transaction.

Profit Maximizing

Profit maximizing is the process by which a firm determines the price and output level that returns the greatest profit.