If Cash Flows from Operating Activities Is a Negative Amount

question 103

Multiple Choice

If cash flows from operating activities is a negative amount:

• A) The company must have a net loss for the year.
• B) The company must have a net profit for the year.
• C) The company must have paid off more debts than it earned during the year.
• D) The company may have net income or a net loss for the year.

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Definitions:

Differential Income

The difference in income between two alternative business decisions, used in assessing the financial viability of each option.

Special Stitching

Unique or customized sewing techniques used to enhance the design or functionality of a textile product.

Variable Cost

An expense that changes in direct proportion to the activity level or volume of production in a business.

Medicare Reimbursement

Payments made by Medicare to health care providers for services rendered to Medicare beneficiaries.