Supplemental Disclosures Required Only When the Statement of Cash Flows

question 32

Multiple Choice

Supplemental disclosures required only when the statement of cash flows is prepared using the indirect method include

• A) a schedule reconciling net income with net cash provided by (used in)operating activities.
• B) amounts paid for interest and taxes.
• C) amounts deducted for depreciation and amortization.
• D) significant noncash investing and financing activities.

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Definitions:

Accounts Payable

Short-term liabilities or debts a company owes to its suppliers or creditors for goods and services received but not yet paid for.

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.

Utilities Expense

Utilities expense refers to the cost incurred by a business for the consumption of utility services such as electricity, water, and gas.

Accounts Payable

Liabilities or amounts owed by a company to creditors for goods and services that have been purchased on credit but not yet paid for.