Three Important Line Items on the Statement of Cash Flows

question 1

Multiple Choice

Three important line items on the statement of cash flows that must be obtained from the income statement include all of the following EXCEPT

• A) depreciation and any non-cash charges.
• B) interest expenses.
• C) net profits after taxes.
• D) cash dividends paid on both preferred and common stocks.

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Definitions:

GAAP or IFRS

Standards and principles that provide the framework for financial accounting and reporting, with GAAP used in the United States and IFRS internationally.

Objectivity and Verifiability

Accounting principles emphasizing the importance of unbiased financial information and the ability to confirm the accuracy of this data.

Just-In-Time (JIT)

A manufacturing strategy that aims to reduce inventory levels and increase efficiency by producing products only as they are needed.

Defects Tolerated

The acceptable number or percentage of defects or errors allowed in a production or manufacturing process.