Below Is an Example of an Incorrectly Prepared Statement of Cash

question 44

Multiple Choice

Below is an example of an incorrectly prepared statement of cash flows. The descriptions of activities are correct. $\begin{array}{l}\text { Cash from operating activities }\\\begin{array}{lr}\text { Net income } & \$ 60,000 \\\text { Depreciation } & (4,000) \\\text { Increase in accounts receivable } & (2,000) \\\text { Increase in deferred tax liability } & (1,000) \\&\$53,000\\\\ \text { Cash from investing activities } &\\ \text { Purchase of marketable securities} &(\$48,000) \\ \text {Dividends paid } &(\$46,5000) \\\\\text { Cash from financing activities } & \\\text { Increase in short-term debt } & \$(500) \\\text { Increase in long-term debt } & (2,500) \\& \$(3,000) \\\text { Increase in cash } & \$ 3,500\end{array}\end{array}$
-The correct cash flows from financing activities is:

• A)($4,500).
• B)$3,000.
• C)$1,000.
• D)None of the above

---

Definitions:

Legitimate Power

Legitimate Power is authority that is officially sanctioned or accepted due to a person’s position or role within an organization or system.

Referent Power

A form of influence where a person elicits compliance or admiration from others based on charisma or personal traits rather than formal authority.

Legal-Rational

A form of authority based on established laws, rules, and procedures that are designed to be objective and impersonal.

Traditional Power

Power that is derived from established customs, practices, or institutions historically recognized within a society or organization.