Match Each Term with the Appropriate Definition

Multiple Choice

Match each term with the appropriate definition.Not all definitions will be used.
-Direct Method

A) A measure of the amount by which current assets exceed current liabilities.
B) Cash inflows and outflows related to the sale or purchase of investments and long-lived assets.
C) Include assets that are very liquid and are purchased by the entity within three months of maturity.
D) These activities include only purchases made with borrowed funds.
E) Must include cash paid for interest and income tax in a separate schedule.
F) Measures the ability of a company to finance its interest payments with its operating cash flow before taxes and interest.
G) Cash inflows and outflows related to financing sources external to the company (owners and lenders) .
H) These activities include money lent by a company as well as money borrowed by a company.
I) Reports the components of cash flows from operating activities as gross receipts and gross payments.
J) This ratio uses net income instead of operating cash flow to analyze a company's ability to finance the cost of its debt.
K) Cash inflows and outflows related to components of net income.
L) Presents the operating activities section of the cash flow statement by adjusting net income to compute cash flows from operating activities.