Which Statement Concerning the Interpretation of a Statement of Cash

question 51

Multiple Choice

Which statement concerning the interpretation of a statement of cash flows is untrue?

• A) The statement of cash flows as required under IAS 7/AASB 107 only goes some of the way in enabling users to establish the liquidity/solvency position of an entity.
• B) Ways in which cash flows can be manipulated include delaying cash payments and employing finance leases.
• C) It is the indirect method rather than the direct method of preparation that is preferred by the standard setters.
• D) The notes to the statement of cash flows are important in interpreting the firm's cash position.

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Definitions:

Operant Conditioning

A form of behavioral conditioning that adjusts the level of a behavior through the addition of positive stimuli or negative consequences.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired: a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Reinforcement

In behavioral psychology, an event that strengthens or increases the likelihood of a behavior by providing a consequence an individual finds rewarding.

Microsystem

In bioecological systems theory, the innermost level of context, which includes an individual’s immediate physical and social environment.