In a Statement of Cash Flows Prepared by the Indirect

question 71

Multiple Choice

In a statement of cash flows prepared by the indirect method, which of the following events would be added to net income?

• A) the sale of a company automobile at a gain.
• B) income in excess of dividends received from an equity-method investment
• C) proceeds from the sale of an available-for-sale investment
• D) loss on the sale of plant assets

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Definitions:

Defective Merchandise

Products that are flawed or malfunctioning and do not meet the warranted or expected standard of performance or safety.

Credit Card Applications

Formal requests submitted by individuals seeking to open a credit card account, requiring financial information to evaluate creditworthiness.

Open-end Credit

A revolving credit line that allows a borrower to spend up to a certain limit, repay it, then borrow again.

Annual Percentage Rate (APR)

The annual rate charged for borrowing or earned through an investment, which reflects the actual yearly cost over the term of a loan.