When Preparing a Statement of Cash Flows Using the Indirect

question 48

Multiple Choice

When preparing a statement of cash flows using the indirect method,which of the following is correct?

• A)Proceeds from the sale of equipment should be added to net income in the operating activities section.
• B)A loss on the sale of land should be added to net income in the operating activities section.
• C)The declaration of a cash dividend should be a use of cash in the financing activities section.
• D)The issuance of a stock dividend should be a use of cash in the financing activities section.
• E)The purchase of land and a building by issuing a long-term note payable should be a source of cash in the financing activities section.

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Definitions:

Mythological Ancestry

The lineage or descendants of characters from myths, often involving gods, heroes, or mythical creatures, used to explain natural phenomena or cultural practices.

Clan

A social group characterized by shared ancestry, often forming a part of larger tribal or community structures.

Lineage

The direct descent from an ancestor; ancestry or pedigree.

Descent Group

A social group whose members claim common ancestry; a fundamental unit in the organization of many societies.