Under the Indirect Method for Preparing the Statement of Cash

question 31

Multiple Choice

Under the indirect method for preparing the statement of cash flows, _____.

• A) each transaction and its effect on cash flows are analyzed
• B) net income is reconciled with net cash flows from operating activities
• C) current liabilities are subtracted from the total cash flows from operating activities
• D) depreciation expense is deducted from net income to calculate the cash flows from operating activities

---

Definitions:

Ectotherm

Animal in which internal temperature is regulated by changes in behavior; for example, a fish or a lizard.

Reptiles

Cold-blooded, vertebrate animals that lay eggs and have skin covered with scales or bony plates.

Metabolic Heat

The heat produced by an organism as a result of its metabolic processes, which helps in maintaining its body temperature.

Homo Sapiens

The species to which all modern human beings belong and the only extant member of the genus Homo.