Presented Below Is the Operating Activities Section of the Statement

question 102

Multiple Choice

Presented below is the operating activities section of the statement of cash flows for Feline Friends Corp.for 2012: Which method of preparing the operating activities section has Feline used?

• A)The direct method.
• B)The indirect method.
• C)Either method.
• D)Cannot be determined without further information.

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Definitions:

Proportional Taxation

A tax system where the tax rate is fixed and does not change with the income level of the taxpayer, implying everyone pays the same percentage of their income in taxes.

Regressive Taxation

A tax system where the tax rate decreases as the taxable amount increases, meaning lower-income individuals pay a higher percentage of their income compared to higher-income earners.

Tax Incidence

The distribution of tax burden among taxpayers; who ultimately pays the tax.

Marginal Tax Rate

The percentage of each additional dollar of income that goes to the tax.