The Third (Final) Step in Preparing the Statement of Cash

question 31

Multiple Choice

The third (final) step in preparing the statement of cash flows is to

• A) analyze changes in noncurrent asset and liability accounts.
• B) compare the net change in cash with the change in the cash account reported on the balance sheet.
• C) determine net cash provided by operating activities.
• D) list the noncash activities.

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Definitions:

Self-Serving Bias

A cognitive bias that involves attributing positive events to one's own character but attributing negative events to external factors, thereby protecting self-esteem.

Fundamental Attribution Error

The tendency to underestimate situational factors and overestimate personal characteristics when explaining others' behaviors.

Defensive Attribution

A cognitive bias theory explaining why people tend to attribute more blame to actions of others than to self, especially in negative situations, as a defense mechanism.

Matching Hypothesis

A theory suggesting that individuals are more likely to form long-lasting relationships with those who are equally matched in social attributes, like physical attractiveness.