Question

LIBCO has decided to use the Direct Method for calculating Cash from Operating Activities in its Statement of Cash Flows. Which of the following are correct? (Mark the correct and leave the incorrect answers unmarked.)

Check All That Apply

• Non-cash expenses will be not be added to Net Income to adjust to Cash from Operating Activities.Non-cash expenses will be not be added to Net Income to adjust to Cash from Operating Activities.

• Any realized gains will be subtracted from Net Income to adjust to Cash from Operating Activities.Any realized gains will be subtracted from Net Income to adjust to Cash from Operating Activities.

• The increase(decrease) in balance sheet operating accounts will not be explicitly included in the Operating Activities sectionThe increase(decrease) in balance sheet operating accounts will not be explicitly included in the Operating Activities section

• LIBCO will explicitly include the line “Cash received from Customers” in the Statement of Cash Flows.LIBCO will explicitly include the line “Cash received from Customers” in the Statement of Cash Flows.

• LIBCO would likely arrive at a different amount for Cash from Operating Activities if she had used the Indirect Method.LIBCO would likely arrive at a different amount for Cash from Operating Activities if she had used the Indirect Method.

• LIBCO will need to provide disclosures of Cash paid for Interest and Cash paid for Taxes separately if using this method.

  LIBCO will need to provide disclosures of Cash paid for Interest and Cash paid for Taxes separately if using this method.

Answer 1