When Preparing the Statement of Cash Flows Using the Indirect

question 106

Multiple Choice

When preparing the statement of cash flows using the indirect method, which statement is NOT true?

• A) Gains on the sale of long-term assets are subtracted from net income.
• B) Losses on the sale of long-term assets are subtracted from net income.
• C) Depreciation expense is added to net income.
• D) Increases in current liabilities are added to net income.

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Definitions:

Sample

A subset of a population selected for measurement, observation, or questioning, to provide statistical information about the whole.

Complete Enumeration

A method of listing all possible outcomes or instances in a situation without omission.

Median Value

The middle number in a sorted list of numbers, effectively separating the higher half from the lower half.

Central Values

Fundamental beliefs or principles that are widely held or given primary importance in a society.