The Net Profit Reported on the Income Statement for the Current

question 25

Multiple Choice

The net profit reported on the income statement for the current year was $50 000. Depreciation on property, plant and equipment was $31 000. What is the amount of cash flows from operating activities that would appear on the statement of cash flows prepared using the indirect method?

• A) $19 000
• B) $49 000
• C) $80 000
• D) $81 000

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Definitions:

Compensatory

Related to making up for a deficiency or lack in one area by excelling or overperforming in another area.

Köhler Effect

A phenomenon in group dynamics where less capable members increase their effort when working collectively, motivated by the desire to contribute to the group's success.

Conjunctive Task

A task in which the performance of the group depends on the least capable member, requiring all members to contribute for success.

Social Compensation

The tendency of individuals in a group to work harder to compensate for the perceived lower performance levels of their peers.