The Only Part That Differs in a Statement of Cash

question 157

Multiple Choice

The only part that differs in a statement of cash flows prepared by the direct method from one prepared by the indirect method is the ________.

• A) financing activities section
• B) investing activities section
• C) operating activities section
• D) non-cash investing and financing activities section

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Definitions:

Treasury Stock

Shares that were once part of the outstanding shares and have been reacquired by the issuing company.

Stockholders' Equity

The portion of a company's assets that belongs to the shareholders after liabilities have been subtracted.

Dividends In Arrears

Unpaid dividend amounts on cumulative preference shares that must be paid out before any dividends can be distributed to common shareholders.

Paid Preferred Dividends

Dividends distributed to preferred stockholders, typically on a fixed schedule, before any dividends are given to common stockholders.