Which of the Following Would Not Be Presented in the Cash

question 136

Multiple Choice

Which of the following would not be presented in the cash flows from operating activities section of the statement of cash flows when the direct method is used?

• A) Dividends paid.
• B) Dividends received.
• C) Neither A nor B would be shown.
• D) Both A and B would be shown.

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Definitions:

Interest-Bearing Note

A debt instrument in which the issuer is obligated to pay a specified interest rate on the principal amount at regular intervals until maturity, in addition to repaying the principal.

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money, or, for corporations, the price paid for the use of borrowed capital.

Contingent Liability

A potential financial obligation that may arise in the future depending on the outcome of an uncertain event or situation.

Probable Loss

A loss in financial terms that is likely to occur based on current information and judgment.