Using the direct method of preparing the statement of cash flows, to determine the cash effects of operating activities, which of the following must be adjusted?
A)Dividends declared
B)Reported revenues and expenses
C)Long-term assets and liabilities from the balance sheet
D)Equity as reported in the balance sheet

Question

Quizplus · Accepted Answer

Reported revenues and expenses must be adjusted to determine the cash effects of operating activities. Dividends declared, long-term assets and liabilities from the balance sheet, and equity as reported in the balance sheet are all related to financing and investing activities and would not be adjusted to determine the cash effects of operating activities.

Using the Direct Method of Preparing the Statement of Cash