Regarding the Use of a Spreadsheet for the Preparation of the Statement

question 80

Multiple Choice

Regarding the use of a spreadsheet for the preparation of the statement pf cash flows,which of the following statements is true?

• A)The T-account approach works well for all companies.
• B)The statement of cash flows cannot be prepared directly from the spreadsheet because additional information is needed.
• C)The spreadsheet is needed when companies face complex situations.
• D)The spreadsheet can only be used if the indirect method for operating activities is also used.

---

Definitions:

Temporary Differences

Differences between the tax base of an asset or liability and its carrying amount in the financial statements, which will result in taxable or deductible amounts in the future.

Taxable Income

The amount of income used to calculate how much the entity owes in taxes to the federal, state, and/or local government.

Pretax Financial Income

The income of a company before taxes are deducted, often used in financial reporting and analysis.

Interperiod Tax Allocation

A method used in accounting to allocate income taxes over different periods to match taxes with the revenues they affect.