Assets and Liabilities Are Classified as Either Current or Long-Term

question 40

True/False

Assets and liabilities are classified as either current or long-term to show their relative liquidity.

---

Definitions:

Net Cash

The amount of cash available after all cash inflows and outflows have been accounted for.

Financing Activities

Transactions and business events that involve raising capital and repaying investors, including issuing equity and debt, dividend payments, and loan repayments.

Net Cash

The amount of cash that remains after deducting cash outflows from cash inflows, reflecting a company's cash liquidity.

Statement Of Cash Flows

The statement of cash flows is a financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, categorizing cash flows into operating, investing, and financing activities.