A Calculation of the Net Cash Provided or Used by Operating

question 52

Multiple Choice

A calculation of the net cash provided or used by operating activities that lists the major classes of operating cash receipts,such as receipts from customers,and subtracts the major classes of operating cash disbursements,such as cash paid for merchandise,is the

• A)Cash basis of accounting
• B)Direct method of calculating net cash provided (or used)by operating activities
• C)Classified statement of cash flows
• D)Indirect method of calculating net cash provided (or used)by operating activities
• E)Net method of recording cash flows from operating activities

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Definitions:

Net Income

The total profit remaining after all expenses, taxes, and costs have been subtracted from total revenue, indicating the financial performance of a company over a specified period.

Cash Flows

This term describes the total amount of money being transferred into and out of a business, particularly in terms of liquid assets.

Operating Activities

Business actions directly related to the production and delivery of goods and services, generating revenue.

Comparative Balance Sheets

Side-by-side financial statements that compare a company's balance sheets at different points in time, typically to analyze trends or changes in financial position.