The Statement of Cash Flows Does Not Include the Change

question 164

Multiple Choice

The Statement of Cash Flows does not include the change in retained earnings account as it is embedded in the statement itself. Which of the following represents the items in the cash flow statement that, when added together, equals the change in retained earnings?

• A) Net income, Stock account changes, Dividends Paid
• B) Net income, Stock account changes, Dividends Paid, Dividend Income
• C) Net income, Stock account changes, Dividends Paid, Addition to Retained Earnings from Income Statement
• D) None of the above

---

Definitions:

Tax Incidence

The study of who ultimately bears the economic burden of a tax, whether producers or consumers.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in its price.

Excise Tax

A tax levied on the sale of particular goods and services, such as alcohol, tobacco, and gasoline.

Pretax Equilibrium

The market condition where supply and demand balance before any taxes are applied.