Which of the Following Sections on a Statement of Cash

question 170

Multiple Choice

Which of the following sections on a statement of cash flows is used to report the cash flow effects of transactions involving a company's stock?

• A)Operating Activities
• B)Investing Activities
• C)Financing Activities
• D)Profit Activities

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting overheads, payroll, taxation, and interest payments.

Net Profit

The financial gain produced after subtracting all expenses, taxes, and costs from total revenue.

Exercise Option

An option in derivatives trading that allows the holder to buy or sell an asset at a predetermined price before or on a specific date.

Convertible

A type of financial security that can be changed into a different form, most commonly a bond that can be converted into shares of the issuing company.