What Is the First Step in Identifying Cash Flows from Operations

question 3

Multiple Choice

What is the first step in identifying cash flows from operations when the indirect method is used?

• A)Find net income from the balance sheet.
• B)Calculate the net change in the cash account.
• C)Add the change in accounts receivable to sales revenue.
• D)Identify the balance sheet accounts that relate to operating activities.

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Definitions:

Coupon Rate

The annual interest rate paid by a bond issuer to its bondholders, typically expressed as a percentage of the bond's face value.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.

Bond Portfolios

Collections of bonds held by investors or institutions, designed to achieve certain financial goals while managing risk and return.

Indexing

The investment strategy of replicating the performance of a market index, often through passive fund management.