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For Each of the Following Items, Indicate (By Placing an X)

question 74

Essay

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows.
-  Col 1  Operating  Direct  Col 2  Operating  Indirect  Col 3  Investing  Col 4  Financing  Decrease in prepaid expenses \begin{array} { | l | c | c | c | c | } \hline & \begin{array} { c } \text { Col 1 } \\\text { Operating } \\\text { Direct }\end{array} & \begin{array} { c } \text { Col 2 } \\\text { Operating } \\\text { Indirect }\end{array} & \begin{array} { c } \text { Col 3 } \\\text { Investing }\end{array} & \begin{array} { c } \text { Col 4 } \\\text { Financing }\end{array} \\\hline \text { Decrease in prepaid expenses } & & & & \\\hline\end{array}

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Definitions:

Defective Product

is a product that fails to meet safety standards or does not operate as advertised, potentially causing harm to consumers.

Purchased

Acquired by paying money or its equivalent; bought.

Strict Liability

A legal principle where someone is held responsible for damages or loss, regardless of fault or intention, often applied in product liability cases.

Reasonable Standard

A benchmark in law and ethics for what is considered acceptable behavior, judged from the perspective of a reasonable person.

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