When Preparing the Statement of Cash Flows Using the Indirect

question 30

Multiple Choice

When preparing the statement of cash flows using the indirect method, which of the following is subtracted from net income to determine cash flows from operations?

• A) losses from equity method investments
• B) increases in deferred-tax assets
• C) bond discount amortization
• D) unrealized gains from available-for-sale securities

---

Definitions:

Current Ratio

A financial metric assessing a firm's capability to settle its short-term obligations using its current assets.

State Unemployment

A government-provided insurance program that offers temporary financial assistance to workers who have lost their jobs.

SUTA

This stands for State Unemployment Tax Act, which is a payroll tax that employers must pay to the state to fund its unemployment benefits program.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.