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Which of the Following Sections of the Statement of Cash

question 35

Multiple Choice

Which of the following sections of the statement of cash flows are presented differently between the direct method and indirect method?


Definitions:

Contingent Liability

(a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or (b) a present obligation that arises from past events but is not recognised because: (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) the amount of the obligation cannot be measured with sufficient reliability.

Business Combination Valuation

The process of estimating the value of different companies coming together through acquisitions or mergers.

Pre-acquisition Entries

Pre-acquisition entries are journal entries made to account for the assets, liabilities, and any non-controlling interest of a company acquired in a business combination at the acquisition date.

Consolidated Cash Account

A single cash account that combines the cash balances of a parent company and its subsidiaries to reflect total available cash.

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