Which of the Following Statements Is Correct with Regard to Investments

question 39

Multiple Choice

Which of the following statements is correct with regard to investments and the statement of cash flows?

• A)When the equity method is used to account for an investment in a company's common stock, the reported share of affiliate net income must be added to net income in the operating activities section of the statement of cash flows.
• B)When the equity method is used to account for an investment in a company's common stock, the cash dividends received are a cash inflow from investing activities.
• C)Any realized or unrealized gains or losses that were reported on the income statement under the fair value method of accounting for investments must be removed from net income in the operating activities section of the statement of cash flows.
• D)When the equity method is used to account for an investment in a company's common stock, the reported share of affiliate dividends must be deducted from net income in the operating activities section of the statement of cash flows.

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Definitions:

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, aiming to provide a description of the set’s overall behavior.

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, aiming to describe the data's center point.

Coding Errors

Errors or bugs in a programming code that prevent the software from running correctly or as intended.

Research Hypotheses

Statements made by researchers that propose a potential relationship between two or more variables.