Which of These Is a Reason Why a Statement of Cash

question 24

Multiple Choice

Which of these is a reason why a statement of cash flows could show a negative cash flow from operating activities even though the statement of comprehensive income showed a profit?

• A)An increase in the amount of inventory held.
• B)A decrease in the amount owing by debtors.
• C)An increase in the amount owing by creditors.
• D)An increase in depreciation charged.

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Definitions:

Country C's Currency

The legal tender issued by a sovereign government or central authority of country C.

Country D's Currency

The official currency issued and used for financial transactions in Country D.

Hedged Position

Adopting an investment strategy that minimizes the risk of adverse price movements in an asset, typically through the use of derivatives.

Exchange Rate

The rate at which one currency can be exchanged for another, often influenced by market forces or government policy.