The Accounting Principle That Requires Significant Noncash Financing and Investing

question 18

Multiple Choice

The accounting principle that requires significant noncash financing and investing activities be reported on the statement of cash flows is the:

• A)Historical cost principle
• B)Materiality principle
• C)Full disclosure principle
• D)Going concern principle
• E)Business entity principle

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Definitions:

Money Supply

The money supply is the total amount of monetary assets available in an economy at a specific time, including cash, bank deposits, and other liquid assets.

Federal Budget Surpluses

Occurs when a government's revenue exceeds its expenditures during a given fiscal period.

Stabilize Economy

Efforts or policies aimed at maintaining economic balance by preventing extreme fluctuations in overall economic activity.

Reagan Tax Cut

Refers to the economic policies implemented during Ronald Reagan's presidency, predominantly significant reductions in income tax rates.