Operating Budgets Are Limited to Service Organizations

question 108

True/False

Operating budgets are limited to service organizations.

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Definitions:

Financing Activities

Transactions related to a company's raising or repaying capital, such as issuing shares, paying dividends, or taking on new loans.

Cash Dividends

Money distributed by a corporation to its shareowners, frequently as a dividend from profits.

Operating Activities

Transactions and other events that are not investing or financing activities, usually involving the production and delivery of goods and services.

Indirect Method

A method used in cash flow statement preparation that adjusts net income for the changes in balance sheet accounts to calculate the cash from operating activities.