1. Which of the following would appear in the operating activities sections of a

Question

1. Which of the following would appear in the operating activities sections of a statement of cash flows prepared using the direct method, but not in one prepared using the indirect method.

A. change in accounts receivable

B depriciation of expense

c. Cash paid to employees

d change in accounts payable

e. change in retained earnings

2. Analysts often take a short cut in estimating a firm's cash from operations: they justadd depreciation back to net income. What is the greatest shortcoming of this approach

A) Depreciation is not relevant to a cash flow analysis.

Bare not considered in the cash flow fromoperations.

C) Changes in working capital elements are disregarded in this approach.

D) Companies do not report their depreciation expenses

3. If we know a present value and an interest rate, we should be able to find a future value. True or false?

Explanation / Answer

1) c CAsh Paid to employees,

2) d - Companies do not report their depreciation expenses

3)False , time period is also required.

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