Under the Direct Method of Preparing the Statement of Cash

question 119

Multiple Choice

Under the direct method of preparing the statement of cash flows,all of the following would be reported under operating activities EXCEPT:

• A)collections from customers.
• B)interest received on notes receivable.
• C)dividends received on investments in stock.
• D)cash proceeds on sale of long-term investments.

Understand the classification of different types of expenses in accounting.

Distinguish between periodic and perpetual inventory systems.

Comprehend the recording of inventory purchases and sales in accounting systems.

Identify the items that are included or excluded in calculating the cost of ending inventory.

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Definitions:

Fed

Short for the Federal Reserve, it is the central banking system of the United States, responsible for monetary policy.

Vague Recommendations

Suggestions or advice provided without specific details, making them unclear or ambiguous in nature.

Goals

Targets or desired outcomes that an individual or organization aims to achieve through planned actions.

Monetary Policy Rule

Guidelines used by central banks to manage the economy by controlling the money supply and interest rates.