The conceptual framework for free cash flows separates all assets and liabilities into the following categories:
A) Current and non-current
B) Monetary and non-monetary
C) Operating and non-operating
D) Operating and financial

Question

Quizplus · Accepted Answer

The conceptual framework for free cash flows separates assets and liabilities into operating and financial categories, not current and non-current, or monetary and non-monetary. Operating assets and liabilities are those directly related to a company's operations, such as accounts receivable and accounts payable. Financial assets and liabilities include items such as investments and long-term debt. By separating assets and liabilities into these categories, it is possible to determine the impact of changes in each on the company's free cash flows.

The Conceptual Framework for Free Cash Flows Separates All Assets