Which of the Following Statements Is False with Regard to Investments

question 43

Multiple Choice

Which of the following statements is false with regard to investments and the cash flow statement?

• A)Dividends received from stock investments increase cash flows from investing activities.
• B)Income from investments accounted for using the equity method does not create cash flows.
• C)Sale of stock investments is a cash inflow from investing activities.
• D)Dividends received from stock investments accounted for using the equity method are not reported as income but are reported as cash flows.

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Definitions:

Budget Surpluses

An excess of income or revenues over expenditures in a given period, meaning the government or organization has more money than it spends.

Automatic Stabilizer

An Automatic Stabilizer is an economic policy or program designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers, such as progressive taxes and welfare.

Unemployment Compensation

Financial payments made by the government to unemployed individuals who are actively seeking work but have not found employment.

Social Security Taxes

Taxes collected by governments to fund social security programs, including retirement benefits, disability insurance, and survivor benefits.