In the preparation of a statement of cash flows, adjustments to net income to reconcile net income to cash from operating activities include
A)dividends received.
B)the difference between the purchase price and the resale price of treasury stock (assuming the cost method of accounting for treasury stock).
C)amortization of organization cost.
D)redemption premium on preferred stock redeemed during the period.
E)All of these answer choices are correct.

Question

Quizplus · Accepted Answer

Amortization of organization cost is an adjustment made to reconcile net income to cash from operating activities in a statement of cash flows. Dividends received and redemption premium on preferred stock redeemed during the period are included in the cash flows from investing activities section, whereas the difference between the purchase price and the resale price of treasury stock (assuming the cost method of accounting for treasury stock) is included in the cash flows from financing activities section.

In the Preparation of a Statement of Cash Flows, Adjustments