Which Would NOT Be Included in the Operating Activities Section

question 52

Multiple Choice

Which would NOT be included in the operating activities section of a direct method statement of cash flow?

• A) Changes in accounts payable
• B) Changes in accounts receivable
• C) Changes in inventory
• D) Changes in long-term notes payable

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Definitions:

Reputation

A long-term standing in the public regard that serves to reassure others that private information is not being concealed; a valuable asset in the face of adverse selection.

Diversification

The strategy of allocating investments or resources among various financial instruments, industries, or other categories to reduce risk.

Economic Losses

Financial shortfalls that occur when a firm's total costs surpass its total revenues, leading to a negative profit margin.

Positively Correlated

Describes a relationship between events such that each event is more likely to occur if the other event also occurs.