Which of the Following Would Not Appear in the Operating

question 11

Multiple Choice

Which of the following would not appear in the operating activities section of a statement of cash flows prepared under the direct method?

• A) Cash receipts from customers
• B) Cash paid for income taxes
• C) Gain on sale of equipment
• D) Cash paid to employees

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in its net profit or loss.

Financial Performance

An indicator of a company's ability to utilize assets from its core business operations to produce income.

Introductory Pricing

A pricing strategy where a new product is sold at a lower price during its initial offering to attract customers and gain market share.

Psychological Pricing

A pricing strategy that uses psychological factors to influence customers' perceptions and encourage them to make a purchase.