Cash Flows from Operating Activities, as Part of the Statement

question 19

True/False

Cash flows from operating activities, as part of the statement of cash flows, include cash transactions that enter into the determination of net income.

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Definitions:

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions, changes in working capital, and items of income or expense to determine net cash provided by operating activities.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not expected to be converted into cash in the coming year.

Statement of Cash Flows

A financial document that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Operating Activities

Activities related to the core business operations of a company, such as selling goods and services.