Using the Indirect Method to Prepare the Statement of Cash

question 27

Multiple Choice

Using the indirect method to prepare the statement of cash flows,dividends paid during the year are:

• A)subtracted from net income in the operating activities section.
• B)added to net income in the operating activities section.
• C)shown as a cash outflow in the financing activities section.
• D)shown as a cash outflow in the investing activities section.

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Definitions:

Protectionist Policies

Economic policies designed to restrict international trade to protect domestic industries from foreign competition.

Domestic Surplus

The extra quantity of a good that producers are willing to supply over what is demanded by domestic consumers, often measured when analyzing the impact of international trade.

Tariffs

Taxes on imported goods, implemented by a government to protect domestic industries from foreign competition or to generate revenue.

Textiles

Materials made from fibers, filaments, threads, or yarns, suitable for use in the production of fabrics and other goods.