When a Statement of Cash Flows Is Prepared Using the Indirect

question 38

Multiple Choice

When a statement of cash flows is prepared using the indirect method,

• A)net income is the starting point in determining cash flows from operations.
• B)cash paid for dividends is not included.
• C)the increase in cash is different than when the direct method is used.
• D)the amount of cash collected from customers is calculated.

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Definitions:

Independent Contractors

Individuals or entities hired to perform specific tasks or services for a company under a contract, without being considered employees of the company.

Principal's Right

This term involves the legal entitlements that a principal (the person for whom an agent acts) holds, especially in matters of agency law, such as the right to direct the agent and be accountable for the agent's acts.

Agent's Performance

Refers to the manner in which an agent conducts their duties on behalf of a principal, typically in a business or legal context.

Subagent

An agent appointed by another agent with the approval of the principal to perform tasks under a delegated agency agreement.