In Calculating Cash Flows from Operating Activities Using the Indirect

question 4

Multiple Choice

In calculating cash flows from operating activities using the indirect method a gain on the sale of equipment is

• A) added to net income.
• B) deducted from net income.
• C) ignored because it does not affect cash.
• D) not reported on a statement of cash flows.

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Definitions:

Groupthink

A phenomenon occurring within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Critical Ideas

Important or influential concepts that have significant impact on thinking or practice in a particular field.

Polarization

The phenomenon in which waves, such as light waves, are restricted to certain directions of vibration, often leading to a division in opinion or a specific orientation of molecules.

Social Loafing

The phenomenon where individuals exert less effort to achieve a goal when they work in a group than when they work alone.