Which of the following mathematical expressions can be used to compute the supplemental operating cash flows? (Δ = delta, which indicates the change in something; t = Period t)
A)Supplemental operating cash flows = ΔCash revenuest − ΔCash expensest − ΔTaxest
B)Supplemental operating cash flows = ΔCash revenuest − ΔCash expensest − ΔDepreciationt
C)Supplemental operating cash flows = ΔCash revenuest − ΔCash expensest + ΔDepreciationt
D)Supplemental operating cash flows = ΔCash revenuest − ΔTaxest
E)Supplemental operating cash flows = ΔCash revenuest − ΔDepreciationt + ΔTaxest

Question

Quizplus · Accepted Answer

Supplemental operating cash flows are calculated by taking the change in cash revenues, subtracting the change in cash expenses, and then subtracting the change in taxes. This formula captures the net change in cash flows from operating activities, excluding non-cash expenses like depreciation.

Which of the Following Mathematical Expressions Can Be Used to Compute