Under the Indirect Method of Preparing the Operating Section of the Statement

question 66

Multiple Choice

Under the indirect method of preparing the operating section of the statement of cash flows,net cash provided by operating activities is $197,000.If the direct method of preparing the operating section of the statement of cash flows was used:

• A)net cash provided by operating activities would be the same,$197,000.
• B)net cash provided by operating activities would be more than $197,000.
• C)net cash provided by operating activities would be less than $197,000.
• D)net cash provided by financing and investing activities would equal $197,000.

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Definitions:

Vault Cash

Paper currency and coins held by a bank in its vault and used to satisfy demands for withdrawals or to resolve deficits in reserve accounts.

Federal Securities

Financial instruments issued by the federal government, such as treasury bills and bonds, used to raise funds for governmental expenditures.

Common Stock

Common stock is a type of security that represents ownership in a corporation, with holders typically having voting rights and potential dividends.

Corporate Bonds

This is a debt of the corporation. Bondholders have loaned money to the company and are its creditors.