Which of the Following Statements Regarding the Calculation of Cash

question 28

Multiple Choice

Which of the following statements regarding the calculation of cash flows from operating activities under the direct method is true?

• A)When the direct method is used,each revenue and expense account on the income statement is individually examined to calculate the cash flows from operating activities.
• B)Noncash revenues and expenses must be included in cash flows from operating activities when preparing a statement of cash flows using the direct method.
• C)Depreciation is reported as a cash inflow in the cash flows from operating activities when the direct method is used.
• D)A loss on the sale of a long-term asset is subtracted in the cash flows from operating activities when the direct method is used.

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Definitions:

Ethical Considerations

Aspects regarding the distinction between right and wrong or good and bad behavior, especially within the context of professional practices.

Multifactor Productivity

A measure of productivity that considers the output generated relative to multiple inputs used, like labor, capital, and materials.

Labour Hours

The total number of hours worked by all employees in a given period, often used to measure workforce productivity.

Labour Productivity

a measure of economic performance that calculates the amount of goods and services produced per hour worked by employees.