Cash Inflows and Outflows Are Not Netted in the Investing

question 55

True/False

Cash inflows and outflows are not netted in the investing activities section of the statement of cash flows but are separately disclosed to give the reader full information.

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Definitions:

External Cost

A cost that a transaction or activity imposes on a party who is not involved in the transaction, often not reflected in market prices.

Negative Externality

A cost that affects a party who did not choose to incur that cost, often associated with environmental, health, and safety concerns of public and private actions.

Positive Externality

A benefit that is enjoyed by a third-party as a result of an economic transaction.

Negative Externalities

Unintended adverse effects of an economic activity on unrelated third parties; they represent a failure of the market to fully account for the impacts of transactions.