When Preparing a Statement of Cash Flows Using the Direct

question 17

Multiple Choice

When preparing a statement of cash flows using the direct method, a net loss reported on the income statement will

• A) automatically result in a cash outflow from operating activities.
• B) be included in financing activities.
• C) be disclosed as a note to the statement of cash flows.
• D) not be included on the statement at all.

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Definitions:

National Highway Transportation Safety

A U.S. government agency that focuses on achieving the highest standards of safety on the nation's roads and highways.

Consumer Product Safety Commission

The U.S. government agency that monitors and regulates the safety of products sold to consumers, aiming to prevent harm from defective or dangerous items.

Unsafe Products

Goods or products that pose a risk or danger to consumers due to design, manufacturing, or labeling defects.

Lead-paint

A toxic paint that contains lead compounds, historically used in buildings and on products, which can cause lead poisoning, especially harmful to children.