Asked by Chris Palomino on Apr 24, 2024
Verified
Which of the following is true regarding the statement of cash flows?
A) Financing activities for corporations include lending money and buying shares.
B) Investing activities involve collecting the necessary funds to operate the business.
C) The purchase of equipment is an example of a financing activity.
D) Revenues are increases in economic resources that result from a business's operating activities.
Statement Of Cash Flows
A financial report that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.
Financing Activities
Transactions and events where cash is raised for, or repaid to, shareholders and creditors, typically including issuing and redeeming bonds, shares, and making loan repayments.
Investing Activities
Transactions involving the purchase and sale of long-term assets and other investments, not including cash equivalents.
- Understand the mechanisms of financing, investing, and operating activities within a business context.
Verified Answer
CP
Crack Physics5 days ago
Final Answer :
D
Explanation :
The statement of cash flows categorizes cash flows into operating, investing, and financing activities. Revenues are indeed increases in economic resources resulting from a business's operating activities, which is why option D is correct. Options A, B, and C incorrectly categorize the nature of financing and investing activities.
Learning Objectives
- Understand the mechanisms of financing, investing, and operating activities within a business context.