Avatar Company Uses the Indirect Method to Prepare Its Statement

question 149

Multiple Choice

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: Which of the following statements would be TRUE?

• A)There was zero net cash flow from transactions involving common stock.
• B)There was a negative cash flow of $28,000 from the issuance of common stock.
• C)There was a positive cash flow of $28,000 from the issuance of common stock.
• D)There was positive cash flow of $30,000 from issuance of common stock.

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Definitions:

Variable Interval Schedule

In operant conditioning, a reinforcement schedule where responses are rewarded after unpredictable time durations, leading to steady and consistent behavior.

Reinforcement

The process of encouraging or establishing a pattern of behavior through rewards or consequences.

Piece-Rate System

A compensation system where employees are paid a fixed rate for each unit of production completed, incentivizing productivity.

Fixed Interval Schedule

A reinforcement schedule in operant conditioning where rewards are provided after a set period of time for the desired behavior.