Which One of the Following Is Found in the Financing

question 156

Multiple Choice

Which one of the following is found in the financing activity section of a statement of cash flows?

• A) Fixed asset acquisition.
• B) Depreciation.
• C) Increase in accounts receivable.
• D) Dividends paid.
• E) Net income.

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Definitions:

Indirect Method

A way of reporting cash flows from operating activities in the statement of cash flows by adjusting net income for changes in balance sheet accounts.

Operating Activities

Activities that relate directly to the running of a business for profit, including production, sales, and distribution.

Net Income

The amount of profit left after all operating expenses, taxes, and interest are deducted from total revenue.

Indirect Method

In cash flow statement preparation, refers to starting with net income and adjusting for non-cash transactions to calculate operating cash flow.