Regarding the Use of a Spreadsheet for the Preparation of the Statement

question 16

Multiple Choice

Regarding the use of a spreadsheet for the preparation of the statement of cash flows, which of the following statements is true?

• A) The T-account approach works well for all companies.
• B) The statement of cash flows cannot be prepared directly from the spreadsheet because additional information is needed.
• C) The spreadsheet is needed when companies face complex situations.
• D) The spreadsheet can only be used if the indirect method for operating activities is also used.

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Definitions:

Expected Return

Expected Return is the estimated profit or loss an investment is predicted to generate, based on historical or projected performance.

Prior Service Cost

A pension accounting term referring to the cost of benefits attributed to employee service in prior periods, often arising from plan amendments.

Pension Expense

The cost recognized by an employer for maintaining a defined benefit pension plan for its employees.

Defined Benefit Plans

Pension plans that promise a specified retirement benefit amount, which is determined by factors such as salary history and duration of employment.