In the Operating Activities Section of the Statement of Cash

question 136

Multiple Choice

In the operating activities section of the statement of cash flows, we start with net income when using:

• A) the direct method.
• B) the indirect method.
• C) both the direct and the indirect method.
• D) neither the direct nor the indirect method.

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Definitions:

Consumer Price Index

A gauge that calculates the mean variation in time of the prices urban consumers pay for a selection of consumer products and services.

Real Rate of Return

The annual percentage return realized on an investment, adjusted for changes in price due to inflation or other external effects.

Portfolio Value

The total worth of all the financial investments held by an individual or institution.

Compounded Quarterly

This refers to the process of applying interest to an initial amount of money (principal) four times a year, at the end of each quarter.