The Item That Would Not Be Included in the Operating

question 47

Multiple Choice

The item that would not be included in the operating section of a statement of cash flows is:

• A)cash interest received.
• B)cash received from the sale of surplus machinery.
• C)cash received from sales.
• D)cash payment of expenses.

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Definitions:

Sales

The process of selling goods or services to customers, typically in exchange for money or other forms of compensation.

Acid-Test Ratio

A financial metric used to gauge a company's liquidity by comparing its most liquid assets, without including inventory, to its current liabilities.

Profitability

This refers to the ability of a business to generate earnings as compared to its expenses over a specified period.

Liquidity

The ease with which assets can be converted into cash without significantly affecting their value.