When Preparing the Operating Activities Section of the Statement of Cash

question 15

True/False

When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in income taxes payable is added to net income.To convert net income to cash flows from operating activities,an increase in income taxes payable means that income tax expense on the income statement is greater than the amount of cash paid for income taxes;therefore,the increase should be added to net income.

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Definitions:

Ambivalence

Mixed feelings or contradictory attitudes towards an object, person, or action, making decision-making difficult.

Change

The process of becoming different, often implying an evolution or transformation in characteristics, conditions, or behaviors.