Which One of the Following Is False

question 76

Multiple Choice

Which one of the following is false?

• A)The statement of cash flows can be prepared using cash and cash equivalents rather than just cash, as its base.
• B)The statement of cash flows reports the sources and uses of cash during a specific period.
• C)The statement of cash flows shows the effects on net income of a company's operating, investing, and financing activities for an accounting period.
• D)The statement of cash flows explains the difference between net income, as shown on the statement of income, and the net cash flows generated from operating activities.

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Definitions:

Double-Declining-Balance

A method of accelerated depreciation which doubles the rate of straight line depreciation, expensing more of the asset's value in the early years of its life.

Scrap Value

The anticipated market value of an asset at the end of its operational lifetime.

Sum-Of-The-Years-Digits

A depreciation method that results in a more accelerated write-off of the asset, calculated by adding together the digits of the asset's useful life years.

MACRS Tables

The Modified Accelerated Cost Recovery System tables used in the United States for tax purposes to determine the depreciation of assets over time.