The 'Bottom Line' in the Statement of Profit or Loss

question 46

Multiple Choice

The 'bottom line' in the statement of profit or loss and other comprehensive income is profit. The 'bottom line' in the statement of cash flows is:

• A) cash flow from operations.
• B) net cash at the end of the year.
• C) net cash at the beginning of the year.
• D) net increase (decrease) in the cash balance over the period.

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Definitions:

Giffen Good

A product for which demand increases as its price increases, contrary to the standard demand model, due to the interplay of income and substitution effects.

Income Effect

The change in an individual's or economy's income and how that change affects the quantity demanded of a good or service.

Price Decrease

A reduction in the cost of a good or service, which can increase consumer demand but may decrease supplier profits.

Consumer's Optimal

The point at which the combination of goods and services purchased by a consumer provides maximum satisfaction or utility, given the consumer's income and the prices of goods.