Which of the Following Items About the Statement of Cash

question 75

Multiple Choice

Which of the following items about the statement of cash flows is correct?

• A)Non-cash expenses such as depreciation are deducted from net income with the indirect method in computing cash flows from operating activities.
• B)Cash equivalents are highly liquid investments with maturities at the date of purchase of less than three months.
• C)The acquisition of land by issuing bonds payable would not appear on the statement of cash flows.
• D)Cash paid for interest would be classified as a financing cash flow.

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Definitions:

Maturity Date

The specified date when the final payment of a loan, bond, or other financial instrument is due to be paid.

Note Dated

Note dated refers to the date on which a promissory note or other financial document was issued or signed, marking the start of when the agreement takes effect.

Accounts Receivable-P. Long

Amounts due to a company for goods or services delivered or used but not yet paid for by its customers, typically within a period longer than one year.

Dishonors

A term often related to financial instruments (like checks or promissory notes) that are not fulfilled as agreed upon, typically due to insufficient funds.