Which of the Following Statements Is Not Correct

question 56

Multiple Choice

Which of the following statements is not correct?

• A)Welfare programs may encourage illegitimate births.
• B)The decline in welfare benefits since the 1970s has been associated with a decline in the percentage of children living with a single parent.
• C)Welfare programs may reduce incentives for people to work.
• D)A negative income tax program uses tax revenues collected from high-income families to provide cash subsidies to low-income families.

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Definitions:

Indirect Method

A way of reporting cash flows from operating activities by starting with net income and adjusting for non-cash transactions.

Direct Method

A way of presenting a cash flow statement where actual cash flows from operating activities are disclosed directly.

Operating Activities

Transactions and events related to the principal revenue-producing activities of an entity, reflected in its cash inflows and outflows.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement by starting with net income and adjusting for changes in non-cash items and operating capital.