When Preparing the Note Attached to the Cash Flow Statement

question 29

Multiple Choice

When preparing the note attached to the cash flow statement reconciling profit and cash flow from operations,proceeds from the disposal of non-current assets are:

• A)Added back to the profit
• B)Subtracted from the profit
• C)Do not appear in the reconciliation
• D)Sometimes added back to the profit and sometimes subtracted from the profit depending on whether a loss or profit on disposal is incurred

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Definitions:

Keynesian

Relating to the economic theories of John Maynard Keynes, which advocate for government intervention to manage business cycles and stimulate the economy during downturns.

New Classical

An economic theory that emphasizes the importance of rational expectations and market-clearing prices in understanding economic fluctuations.

Rational Expectations

The hypothesis that forecasts of future values of economically relevant variables are based on all available information and are therefore optimal.

Keynesians

Followers and theorists of Keynesian economics, which emphasizes the need for government intervention in economies to manage output and demand through fiscal and monetary policies.