A Note to the Accounts Reconciling Cash Flows from Operating

question 58

Multiple Choice

A note to the accounts reconciling cash flows from operating activities to net profit is required because:

• A) Complex calculations are required to convert cash based revenues.
• B) Items such as depreciation are only recorded in a cash system and not an accrual system.
• C) There is likely to be a disparity between cash from operations under AASB 107 and the profits reported in the income statement.
• D) The direct method is required under AASB 107.
• E) None of the given answers.

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Definitions:

Long-term Memory

The capacity of the brain to store and retrieve information over extended periods, often throughout an individual's lifetime.

Procedural Memory

The type of long-term memory involved in the skill of performing tasks without conscious awareness of the learned skills, such as riding a bike.

Flashbulb Memory

Highly detailed and vivid memories of surprising and emotionally significant events, which seem to be recorded in one's memory almost as if by a camera's flash.

Implicit Memory

A type of memory that enables us to perform tasks without conscious awareness of these previous experiences.