In a Statement of Cash Flows Using the Indirect Method

question 12

Multiple Choice

In a statement of cash flows using the indirect method, an increase in available-for-sale securities due to an increase in their fair value should be reported as:

• A)A deduction from net income in determining cash flows from operating activities.
• B)An addition to net income in determining cash flows from operating activities.
• C)An investing activity.
• D)Not reporteD.The unrealized gain increased other comprehensive income, not net income, and is not a cash flow.

---

Definitions:

Wrongful Dismissal

Wrongful Dismissal occurs when an employee is terminated from their job in violation of the employment contract or against labor laws protecting employees.

Proper Notice

A legally defined announcement or communication stipulated by law or agreement that is required to be made under specific circumstances.

Damages

Monetary compensation awarded to a party in a lawsuit for loss or injury suffered due to another party's actions or breach of contract.

Reasonable Notice

The sufficient and fair amount of time one party must give another to prepare for or respond to an action, often legally defined in various contexts.