In Calculating Cash Flows from Operating Activities Using the Indirect

question 2

Multiple Choice

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

• A) added to net income
• B) deducted from net income
• C) ignored because it does not affect cash
• D) reported supplementally as a noncash investing and financing activity

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Definitions:

Sampling Distribution

The distribution of probabilities for a particular statistic based on a random sample, which is used to infer characteristics of the population.

Miles Per Gallon

A measure of fuel efficiency in vehicles, indicating the distance in miles a vehicle can travel per gallon of fuel consumed.

Simple Random Sample

A segment of a statistical group where every member possesses an identical probability of selection.

Sampling Plan

A strategy that outlines how samples will be collected from a population for the purpose of research or quality control.