Using the Direct Method of Preparing the Statement of Cash

question 45

Multiple Choice

Using the direct method of preparing the statement of cash flows, to determine the cash effects of operating activities, which of the following must be adjusted?

• A)Dividends declared
• B)Reported revenues and expenses
• C)Long-term assets and liabilities from the balance sheet
• D)Equity as reported in the balance sheet

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Definitions:

Federal Trade Commission

A U.S. federal agency tasked with protecting consumers and ensuring a strong competitive market by preventing anticompetitive, deceptive, and unfair business practices.

Friendly Merger

A merger transaction agreed upon and conducted in a cooperative manner by all involved parties, typically with shared strategic goals.

Friendly Consolidation

A type of corporate merger or acquisition that is agreed upon and pursued with the cooperation of both the target and acquiring companies.

Agreement in Principle

A preliminary agreement outlining the basic terms and conditions under which an investment will be made, pending further negotiations and due diligence.