When Using the Indirect Method to Determine Operating Cash Flows

question 135

Multiple Choice

When using the indirect method to determine operating cash flows, where is the gain from selling a long-term investment recognized? (The proceeds from selling the investment are considered separately.)

• A)operating activity
• B)investing activity
• C)financing activity
• D)noncash investing or financing activity
• E)not reported on the statement of cash flows

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Definitions:

OLTP

Online Transaction Processing, a class of systems that facilitates and manages transaction-oriented applications, typically for data entry and retrieval transaction processing.

Historical Data

Data concerning past events and transactions that are stored and analyzed for trends, forecasting, and making decisions.

Explicit Knowledge

Knowledge that is easily communicated and shared, typically in the form of documents, manuals, or any documented procedure.

Organization's Culture

The shared values, beliefs, attitudes, and practices that characterize an organization, influencing its people and how work is conducted.