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.

Understand the concept of discovered preferences and their impact on economic decision-making.

Recognize the limitations of rational choice theory in explaining consumer behavior.

Identify and explain various cognitive biases and heuristics that influence economic decision-making, such as the anchoring effect and hyperbolic discounting.

Understand the effect of framing on decision-making and choice.

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Definitions:

Corrected

Processed or amended to rectify errors or inaccuracies.

Risk of Loss

The legal responsibility regarding who bears the financial burden if goods are damaged or lost during transaction or shipment.

Destroyed

To have been made unusable or ruined beyond repair.

Performance

In contract law, performance refers to the fulfillment of a contractual duty, as promised in a contract.