In a Statement of Cash Flows Using the Indirect Method

question 70

Multiple Choice

In a statement of cash flows using the indirect method, an increase in available-for-sale securities due to an increase in their fair value should be reported as:

• A)A deduction from net income in determining cash flows from operating activities.
• B)An addition to net income in determining cash flows from operating activities.
• C)An investing activity.
• D)Not reported.The unrealized gain increased other comprehensive income, not net income, and is not a cash flow.

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Definitions:

Spin-Offs

The creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company.

Sell-Offs

The rapid selling of assets such as stocks, bonds, or commodities in the financial market, often in response to market or economic indicators.

Angel Capitalism

An investment approach where affluent individuals provide capital for startup companies in exchange for ownership equity or convertible debt.