Which of the Following Is Not True Regarding the Statement

question 96

Multiple Choice

Which of the following is not true regarding the Statement of Cash Flows for proprietary funds?

• A) At the bottom of the statement, net income is reconciled to cash flows from operations.
• B) Interest and dividends received are recorded as investing activities.
• C) The direct method is required for reporting cash flows from operations.
• D) Four categories of cash flows are used.

---

Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits while maintaining a consistent return on equity and without raising additional equity financing.

External Financing

Funds raised from outside the business, e.g., through borrowing or issuing equity.

Debt-equity Ratio

The ratio reflecting on the strategic use of shareholders' equity and debt for the purpose of financing assets.

Growth Rate

The rate at which a company's earnings or revenue increases over a specified period, typically expressed as a percentage.