In a Statement of Cash Flows Using the Indirect Method

question 11

Multiple Choice

In a statement of cash flows using the indirect method, an increase in available-for-sale securities not 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)A net cash outflow from investing activity.
• D)A net cash inflow from investing activity.The increase would indicate an investment in the securities.

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Definitions:

Ethical Test

A set of criteria applied to determine whether an action or decision is morally right, examining factors like fairness, harm, and integrity.

Ethical Decision-Making

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles and values.

Decision-Making Strategies

Approaches or methodologies used to select the best alternative from several options based on specific criteria or objectives.

Code of Ethics

A set of principles and guidelines designed to help professionals conduct business honestly and with integrity.