Which of the Following Equations Is Correct

question 5

Multiple Choice

Which of the following equations is correct?

• A) Income statement items + Increase in related receivables + Decrease in related receivables - Increase in related liabilities - Decrease in related liabilities = Cash flow
• B) Income statement items - Increase in related receivables + Decrease in related receivables + Increase in related liabilities - Decrease in related liabilities = Cash flow
• C) Income statement items - Increase in related receivables - Decrease in related receivables + Increase in related liabilities + Decrease in related liabilities = Cash flow
• D) Income statement items + Increase in related receivables - Decrease in related receivables - Increase in related liabilities + Decrease in related liabilities = Cash flow

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Definitions:

Capital Cost

The one-time expenditure on physical assets like buildings, machinery, and equipment, as well as the costs associated with bringing a project to a commercially operable status.

Issuance

The process of offering new securities for sale to investors, often through stocks or bonds, to raise capital.

Gross Domestic Product

The total value of all goods and services produced within a country's borders in a specific time period, used as a broad indicator of an economy's health.

Income Side

The aspect of national accounts that deals with how income is generated, distributed, and used in an economy, typically measuring aspects like wages, rents, and profits.