Which of the Following Statements Is False Regarding How the Cash

question 142

Multiple Choice

Which of the following statements is false regarding how the cash flow effects of the changes in the Equipment and Accumulated Depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the Operating Activities section?

• A)Cash proceeds from the sale of the equipment would be reported as a cash inflow in the Investing Activities section.
• B)The cash paid to purchase equipment would be reported as a cash outflow in the Investing Activities section
• C)Depreciation expense would be added to net income in the Operating Activities section.
• D)A loss on the sale of the equipment would be subtracted from net income in the Operating Activities section

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Definitions:

Minimum Wage Laws

Legislation that sets the lowest hourly rate that employers can legally pay their employees.

Unemployment Levels

The proportion of the labor force that is jobless and actively seeking employment.

Price Level

An indication of the average prices of goods and services in an economy at a specific time, often used to measure inflation.

Nominal Wages

The amount of money paid to an employee before adjustments for factors like inflation, not reflecting the real purchasing power of the income.