An Entity's Net Cash Flow from Operating Activities Is Important

question 60

Multiple Choice

An entity's net cash flow from operating activities is important for users of the statement of cash flows because it:

• A) indicates the entity's ability to generate cash.
• B) represents the entity's cash flows from normal business operations.
• C) indicates that the business is meeting its current obligations.
• D) all of the above options are true.

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Definitions:

British Pound

The currency of the United Kingdom, symbolized as £ and known officially as the pound sterling.

Exchange Rates

The price at which one currency can be exchanged for another.

Specialization

The process of focusing on a limited scope of activities, products, or services to gain efficiency or expertise.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others.