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Of the Three Types of Business Activities Reported on a Statement

question 79

True/False

Of the three types of business activities reported on a statement of cash flows-investing,financing,and operating-financing activities are the most important when evaluating a business that is up and running.

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Definitions:

Self-Employment Income

Self-Employment Income is money earned from carrying out business activities or providing services as an independent contractor, rather than as an employee.

Advance Rental Payments

Prepayments of rent, often required by landlords, accounted for before the period of use or occupancy.

Security Deposits

Funds held by a landlord as a financial protection against damage to property or unpaid rent by a tenant, to be returned at the end of a lease term under certain conditions.

Passive Activities

Economic activities in which the individual does not materially participate, often resulting in income or losses for tax purposes.

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