One of the Purposes of the Statement of Cash Flows

question 11

Multiple Choice

One of the purposes of the statement of cash flows is to ________.

• A) determine the operating income of a business
• B) to calculate inventory turnover
• C) evaluate the level of debt and leverage of a company
• D) predict the ability of a company to pay debts and dividends

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Definitions:

Practical

Denotes something that is oriented towards action or utility, often emphasizing effectiveness and convenience in real-life situations.

Good Theory

A well-substantiated explanation of some aspect of the natural world that is acquired through the scientific method and repeatedly tested and confirmed through observation and experimentation.

Operational Definition

A clear, precise way of defining a concept by specifying the operations or procedures used to measure or identify it.

Variable

An element, feature, or factor that is likely to vary or change in value between different individuals or under different conditions.