Which of the Following Are the Activities That Are Included

question 38

Multiple Choice

Which of the following are the activities that are included in the operating activities section of the statement of cash flows?

• A) Activities that obtain the cash needed to launch and sustain the business are included in the operating activities section.
• B) Activities that create revenue or expenses in the entity's major line of business are included in the operating activities section.
• C) Activities that increase or decrease long-term assets are included in the operating activities section.
• D) Activities that pertain to construction of new facilities are included in the operating activities section.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, usually with dividends that are paid out before those to common stockholders.

Common Stock

A type of security that signifies ownership in a corporation, entitling the holder to a share of the company's assets and profits.

Pre-Tax Cost of Debt

The interest rate a company pays on its borrowings before taking into account any tax deductions.

Zero-Coupon Bonds

Zero-coupon bonds are debt securities that are issued at a discount to their face value and don’t pay interest before maturity; instead, investors receive the face value at maturity.