When Preparing the Statement of Cash Flows Using the Indirect

question 22

Multiple Choice

When preparing the statement of cash flows using the indirect method,the payment of dividends would appear as:

• A) a decrease in the operating activities section
• B) an increase in the operating activities section
• C) a use of cash in the financing activities section
• D) a source of cash in the financing activities section

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Definitions:

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit by the cost of the investment.

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Profit Centers

Segments or areas within an organization that are responsible for generating their own revenues and profits.

Square Footage

Square Footage is a measurement of area used primarily in the United States to indicate the size of a space, such as a room, house, or building, measured in feet.