A Boat Loaded with Scrap Iron Floats in a Swimming

question 35

Multiple Choice

A boat loaded with scrap iron floats in a swimming pool. When the iron is thrown overboard, the pool level will

• A) fall.
• B) rise.
• C) remain unchanged.

---

Definitions:

Direct Approach

A method of financial reporting or problem solving that involves straightforward, clear communication without indirectness.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments not included in cash equivalents.

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of a company.

Operating Activities

Financial transactions and events related to the core business functions of a company, as reported in the cash flow statement.