All Classifications on the Balance Sheet Have a General Relationship

question 97

Multiple Choice

All classifications on the Balance Sheet have a general relationship with sections identified on the Statement of Cash Flows.Indicate which relationships are correctly identified in the table below. $$\begin{array} { | c | c | c | } \hline \# & \begin{array} { c } \text { Classification on the } \\\text { Balance Sheet }\end{array} & \begin{array} { c } \text { Section on Statement of } \\\text { Cash Flows }\end{array} \\\hline \text { I } & \text { Bonds Payable } & \text { Financing } \\\hline \text { II } & \text { Equipment } & \text { Operating } \\\hline \text { III } & \text { Common Stock } & \text { Financing } \\\hline \text { N } & \text { Accounts Payable } & \text { Operating } \\\hline \text { V } & \text { Accounts Receivable } & \text { Operating } \\\hline\end{array}$$

• A)IV,V.
• B)I,II,III.
• C)I,III,IV,V.

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Definitions:

Break-Even Quantity

The number of units that must be sold for total revenues to equal total costs, resulting in no profit or loss.

Fixed Costs

Business expenses that remain constant regardless of the level of production or sales activities.

Marginal Cost

The additional cost incurred by producing one more unit of a particular good or service.

Sunk Cost

Expenses that have already been incurred and cannot be recovered, which should not influence future business decisions.