Which of the Following Is Not Accurate in Depicting Cash

question 35

Multiple Choice

Which of the following is not accurate in depicting cash flows from operations?

• A) (Revenues - expenses) (1 - tax rate) + (depreciation x tax rate)
• B) (Revenues - expenses - taxes paid)
• C) (Net profit + depreciation)
• D) (Revenues - cash expenses - taxes paid)

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Definitions:

Goodwill Method

An accounting method used to evaluate the excess of purchase price over the fair value of net identifiable assets acquired in a business combination.

Journal Entries

Recorded transactions in the accounting records of a business that are used to transfer amounts from one account to another, ensuring the ledger remains in balance.

Fair Value

Fair value is an estimate of the market value of an asset, based on its current price in a fair and open market transaction.

Bonus Method

A method in accounting for partnerships where a new partner's investment is recorded at an amount that is different from the stated value of the partnership's net assets, affecting the capital accounts of the existing partners.