In Order to Assess an Entity's Cash Performance It Is

question 31

Multiple Choice

In order to assess an entity's cash performance it is common to classify its activities into operating, investing and financing. For a local soccer club, which of the following would be an operating activity?

• A) Receipt of membership fees from players.
• B) Purchasing new soccer goals for all fields and age groups.
• C) Repaying a loan for the clubhouse.
• D) Purchasing a new coffee machine for the clubhouse.

---

Definitions:

Estimated Annual Net Income

The projection of a company's net income over the course of a future year, based on current trends and expectations.

Straight-Line Depreciation

A way of allocating the expenditure of a physical asset in uniform annual installments over its lifespan.

Average Rate of Return

A financial ratio that shows the average annual return on an investment, expressed as a percentage of the initial investment cost.

Estimated Annual Net Income

The projection of net earnings over a given fiscal year, taking into account all expected revenue and expenses.