The Cash Flows from Operating Activities Section of the Statement

question 74

Multiple Choice

The cash flows from operating activities section of the statement of cash flows considers

• A) interest expense.
• B) cost of raw materials.
• C) dividends paid.
• D) stock repurchases.

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Definitions:

Consolidation

The process of combining the financial statements of a parent company with those of its subsidiaries, to present accounts as if the group were a single entity.

Adjustments

Changes made to preliminary financial statement figures to correct errors, account for prepayments, accruals, or to reflect a more accurate representation of the financial position.

Acquisition Method

An accounting technique used in consolidating the financial statements of a group in which a new acquisition is included.

Business Combinations

Transactions in which one entity gains control over one or more other businesses, including mergers, purchases of net assets, and consolidations.