Which of the Following Describes the Operating Activities Section of the Statement

question 66

Multiple Choice

Which of the following describes the operating activities section of the statement of cash flows?

• A) It reports cash receipts and cash payments that increase or decrease long-term assets.
• B) It includes cash inflows and outflows related to long-term liabilities and equity.
• C) It reports on activities that create revenue or expenses for the entity's business.
• D) It reports on how cash flows affect the total assets and total liabilities.

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Definitions:

Accounting Exposure

The risk that a company's financial statements can be affected by changes in exchange rates, influencing the reported earnings and financial position.

Apparent Gain

A perceived increase in value or profit that might not reflect the actual financial condition or performance.

Temporal Method

An accounting technique used for converting the financial statements of a subsidiary into the parent company's reporting currency, by using exchange rates based on the timing of the underlying transactions.

Year-End Spot Rate

The exchange rate of one currency to another at the close of the last trading day of the financial year.