If Cash Flows from Operating Activities Is a Negative Amount

question 86

Multiple Choice

If cash flows from operating activities is a negative amount:

• A) The company must have a 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 profit or a loss for the year.

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Definitions:

Equitable Principles

Principles based on fairness, morality, and justice rather than strict rules of law.

Reliance Damages

Compensation awarded for losses suffered as a result of relying on a promise or contract that was not fulfilled.

Liquidated Damages

Pre-agreed upon sums specified in a contract, payable as compensation for breach or failure to meet specific terms.

Acknowledged Damages

Damages that have been recognized and confirmed by the parties involved in a dispute or by a legal authority.