In Calculating Cash Flows from Operating Activities Using the Indirect

question 2

Multiple Choice

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

• A) added to net income
• B) deducted from net income
• C) ignored because it does not affect cash
• D) reported supplementally as a noncash investing and financing activity

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Definitions:

Expectancy Theory

A motivational theory suggesting that individuals are motivated to act in a certain way based on their expectation that the act will be followed by a desired outcome.

Instrumentality

In motivation theory, the perceived relationship between performing a specific behavior and achieving certain outcomes, emphasizing the means-to-an-end belief.

Expectancy Theory

A motivational theory suggesting that individuals are more likely to engage in certain behaviors based on the expected outcomes and the attractiveness of those outcomes.

Expectancy

In motivational psychology, expectancy refers to the belief that one's effort will lead to the attainment of desired performance goals.