All of the Following Statements Related to Preparation of the Statement

question 56

Multiple Choice

All of the following statements related to preparation of the statement of cash flows under U.S.GAAP and IFRS are true except:

• A)Both U.S.GAAP and IFRS permit the reporting of cash flows from operating activities using either the direct or indirect method.
• B)IFRS permits classification of cash outflows for interest expense under operating or financing depending on which one results in better cash flows from operating activities.
• C)U.S.GAAP requires cash outflows for income tax be classified as operating activities.
• D)IFRS permits the splitting of income tax cash flows among operating, investing, and financing depending on the sources of that tax.
• E)IFRS permits classification of interest expense under operating or financing activities provided it is consistently applied across periods.

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Definitions:

Physical Contact

The direct touching or connection between objects or components, often relevant in switches, sensors, and electrical circuits.

Electromechanical Relay

A switch operated by an electromagnet to open or close one or many sets of contacts, used in control systems.

Electromagnetism

The branch of physics concerned with the interaction of electric currents or fields and magnetic fields.

Fiber Optic Sensor

A sensing device that uses light guided through fibers to detect changes in a parameter, such as temperature or pressure.