Under the Indirect Method of Preparing the Operating Section of the Statement

question 100

Multiple Choice

Under the indirect method of preparing the operating section of the statement of cash flows, net cash provided by operating activities is $12,670. If the direct method of preparing the operating section of the statement of cash flows was used:

• A)cash provided by operating activities would be more than $12,670.
• B)cash provided by operating activities would be less than $12,670.
• C)cash provided by operating activities would be the same, $12,670.
• D)cannot be determined from the facts given.

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Definitions:

GDP

Gross Domestic Product, the total value of all final goods and services produced within a country in a given period of time.

Tax Cuts

A reduction in the amount of taxes imposed by a government on individuals or businesses.

Monetary Policy

The process by which a central bank, currency board, or monetary authority controls the supply of money, or trading in foreign exchange markets.

Fiscal Policy

Government policy regarding taxation and spending to influence the economy.