Which of the Following Sections of the Statement of Cash

question 87

Multiple Choice

Which of the following sections of the statement of cash flows includes activities that affect net income on the income statement?

• A)the financing activities section
• B)the operating activities section
• C)the investing activities section
• D)the non-cash investing and financing section

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Definitions:

Effective-Interest Amortization

A method of calculating the amortized cost of a bond or loan based on the periodic interest rate applied to the carrying amount, resulting in an equal interest expense over the period.

Bonds

Fixed-income investments representing loans to borrowers such as corporations or governments, paid back with interest over time.

Interest Accrual

The process of recognizing interest expense or interest income that has been earned but not yet paid or received.

Earnings Per Share

A company's net profit divided by the number of its common shares outstanding, indicating the profitability on a per-share basis.