Harrison Company Uses the Indirect Method to Prepare Its Statement

question 23

Multiple Choice

Harrison Company uses the indirect method to prepare its statement of cash flows. Refer to the following information for the year 2014: 1) Retained Earnings, beginning balance, $138,000
2) Retained Earnings, ending balance, $125,000
"3) Company reported net loss of $13,000 for the year.
What was the amount of dividends declared during the year?"

• A)$4,000
• B)$2,000
• C)Zero
• D)$3,000

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Definitions:

Reserve Requirement

The Reserve Requirement is a central banking regulation that sets the minimum amount of reserves each bank must hold as a proportion of its deposits, a tool used to control the money supply.

Open Market Operations

Activities by a central bank to buy or sell government securities in the open market to influence the money supply and interest rates.

Reserve Requirement

A regulation set by central banks that specifies the minimum amount of reserves a bank must hold in relation to customer deposits.

Open Market Purchase

A monetary policy tool where the central bank buys government securities from the market in order to expand the money supply.