When Preparing the Statement of Cash Flows Using the Indirect

question 46

Multiple Choice

When preparing the statement of cash flows using the indirect method for determining net cash flows from operating activities, depreciation is added to net income because:

• A) It was deducted as an expense on the income statement, but does not require cash.
• B) It was deducted as an expense on the income statement and affects the amount of cash.
• C) It is a significant portion of the year's expenses.
• D) It represents a source or inflow of cash.

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Definitions:

Antecedent

An event or environment condition that precedes and triggers a behavior or response.

Ellis's ABC

A cognitive-behavioral therapy model developed by Albert Ellis, focusing on the relationship between beliefs (B), consequences (C), and activating events (A).

Activating Events

Situations or experiences that trigger a psychological response, often discussed in cognitive-behavioral therapy to address emotional reactions.

Unresolved Conflicts

Psychological term referring to internal or external disputes that an individual fails to find a resolution for, often leading to stress or psychological discomfort.