Which of the Following Items About the Statement of Cash

question 5

Multiple Choice

Which of the following items about the statement of cash flows is correct?

• A)Noncash expenses such as depreciation are subtracted from net income when using the indirect method for computing cash flows from operating activities.
• B)Cash equivalents are highly liquid investments with original maturities of less than three months.
• C)Repurchasing stock from owners would be classified as an investing cash outflow.
• D)Cash paid for interest would be classified as a financing cash outflow.

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Definitions:

Efficacy

The ability to produce a desired or intended result, often used in the context of medications or treatments in clinical trials.

Clinical Trial

A research study that tests how well new medical approaches work in people.

Usual Circumstances

The typical or normal conditions or situations in which something is done or occurs.

Cost-benefit Ratio

An analysis that compares the costs and benefits of an intervention or action, typically expressed as a ratio or a net value.