When Net Cash from Operating Activities Is Presented by the Direct

question 172

Multiple Choice

When net cash from operating activities is presented by the direct method, the statement of cash flows is accompanied by a supplementary schedule reconciling:

• A) Net cash from operating activities with net sales.
• B) Profit for the year with the net increase or decrease in cash and cash equivalents.
• C) Profit for the year with net cash from operating activities.
• D) Net cash from operating activities shown in the statement with that which would result from use of the indirect method.

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Definitions:

Thoracic Duct

The largest lymphatic vessel in the body, which drains lymph from the lower and left side of the body into the venous system.

Cisterna Chyli

A dilated sac at the lower end of the thoracic duct into which lymph from the lower limbs and abdomen drains.

Cardiovascular System

The organ system that circulates blood through the body, consisting of the heart, blood, and blood vessels.

Palatine Tonsils

A pair of soft tissue masses located at the rear of the throat, part of the immune system.