On the Statement of Cash Flows Prepared by the Indirect

question 140

Multiple Choice

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be

• A) deducted from net income in converting the net income reported on the income statement to cash flows from operating activities
• B) added to net income in converting the net income reported on the income statement to cash flows from operating activities
• C) added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
• D) deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

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Definitions:

Nondiscriminatory

A principle or practice that ensures equal treatment and opportunities for all, without biases based on race, gender, age, or other irrelevant distinctions.

Territory Split

The division of geographical or market areas among sales representatives to ensure comprehensive coverage and avoid overlap.

Sales Revenue

The total income generated from the sale of goods or services before any expenses are subtracted. It is a key indicator of a company's financial health and performance.

Commission Salesperson

An individual who earns income based on the volume or value of sales they generate, typically receiving a percentage of the sales as their compensation.