Assume That the Fitzgerald Corporation Uses the Indirect Method to Depict

question 118

Multiple Choice

Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows.Indicate where, if at all, a stock dividend declared and issued would be classified on the statement of cash flows.

• A)Operating activities section.
• B)Investing activities section.
• C)Financing activities section.
• D)Does not represent a cash flow.

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Definitions:

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, or some component thereof, that is attributable to a particular risk and could affect profit or loss.

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified future date for a price that is agreed upon today.

Trade Payable

An amount owed by a business to its suppliers shown as a liability on the company's balance sheet.

Hedge Ratio

The proportion of an asset's or liability's exposure that is hedged by a derivative contract, reflecting the effectiveness of the hedge.