If the Calculation of Net Cash Flows from Operating Activities

question 39

Multiple Choice

If the calculation of net cash flows from operating activities starts with net income, the company:

• A) is using the net income method.
• B) will remove the effects of all noncash items included in the calculation of net income.
• C) is using the direct method.
• D) will add all noncash items not included in the calculation of net income.

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Definitions:

Industrial Discharge Permit

A government authorization for a business to release specified amounts and types of waste into the environment.

Publicly Owned Treatment Works

Facilities owned by a state or municipality that are designed to treat municipal sewage or industrial wastewater.

Ocean Dumping

The disposal of waste materials directly into the ocean, often regulated to prevent environmental harm.

Marine Protection, Research, and Sanctuaries Act

United States legislation focused on the preservation and management of marine environments, often referred to as the Ocean Dumping Act.