For Nonfinancial Firms Using IFRS Which of the Following Is

question 27

Multiple Choice

For nonfinancial firms using IFRS which of the following is true?

• A)In most cases,cash flows from income taxes must be reported separately as an operating activity.
• B)Interest and dividends paid may be reported as either operating or investing activities.
• C)Bank overdrafts repayable on demand used as part of normal cash management activities must include those overdrafts as part of financing activities.
• D)Firms using the direct method must provide a schedule reconciling net income to cash flows from operating activities.

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Definitions:

Earnings Per Share

A profitability measure that indicates the portion of a company's profit allocated to each outstanding share of common stock, calculated as net income minus dividends on preferred stock divided by the average outstanding shares.

Earnings Before Taxes

A company's profit before taxation is deducted.

Industry Average

A statistical measure representing the typical performance within a particular industry, serving as a benchmark for evaluating individual companies.

Du Pont Identity

A formula that decomposes a company's return on equity into three components: profit margin, asset turnover, and financial leverage.