Which of the Following Statements Is True About the Operating

question 29

Multiple Choice

Which of the following statements is true about the operating activities section?

• A) In a direct method cash flow statement,the section starts with net income.
• B) Net income is not included in an indirect method cash flow statement.
• C) Regardless of the method used,net cash from operating activities is the same.
• D) The indirect method results in a higher amount for cash from operating activities if there is net income and in a lower amount if there is a net loss.

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Definitions:

Employers

Individuals or entities that hire and pay others for their labor or services in a variety of employment contexts.

Wage Earners

Individuals who receive compensation for their labor or services in the form of wages or salary.

Perfectly Inelastic

Describes a situation where the quantity demanded or supplied is completely unresponsive to price changes.

Excise Tax

A tax levied on specific goods or services, such as tobacco, alcohol, and gasoline, often intended to discourage their use or generate revenue.