Which of the Following Statements Is Correct with Respect to the Determination

question 83

Multiple Choice

Which of the following statements is correct with respect to the determination of cash flows from operating activities?

• A)A decrease in inventory is subtracted from net income.
• B)An increase in accounts payable is subtracted from net income.
• C)An increase in inventory is subtracted from net income.
• D)A decrease in accounts payable is added to net income.

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Definitions:

Arbitrage

The process of buying and selling assets or securities across different markets or forums to profit from price differences.

Vertical Contracts

Agreements between firms at different levels of the supply chain, such as between a manufacturer and a retailer, aimed at controlling or coordinating activities.

Costly Activities

tasks or operations that require a high expenditure of resources, such as time, money, or labor.

New Product

A good, service, or idea that has not previously been brought to the market by its seller.