Which of the Following Would Appear in Both the Operating

question 11

Multiple Choice

Which of the following would appear in both the operating activities section of the direct method format and the reconciliation of earnings to net operating cash flow format?

• A) Sale of cash equivalents at a gain
• B) Sale of cash equivalents at cost
• C) Dividends received on equity method investments
• D) Collection of an account receivable previously written off

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Definitions:

Current Assets

Items of value that are forecasted to be liquidated, traded, or depleted within the span of one year or throughout the duration of the operational cycle, whichever timeframe is greater.

Current Liabilities

Obligations that a company expects to pay within one year or within its normal operating cycle, whichever is longer, including accounts payable, short-term loans, and other accrued liabilities.

Current Ratio

A financial metric indicating a firm's capacity to settle short-term debts, determined by dividing current assets by current liabilities.

Conceptual Framework

An underlying structure in accounting that outlines the objectives and fundamentals leading to consistent standards and financial reporting.