If a Company Uses the Indirect Method to Determine Cash

question 11

Multiple Choice

If a company uses the indirect method to determine cash flows from operating activities,gains:

• A)must be added to net income and losses subtracted from net income.
• B)and losses must be added to net income.
• C)must be subtracted from net income and losses added to net income.
• D)and losses must be subtracted from net income.

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Definitions:

Informational Influence

A form of social influence that occurs when an individual turns to the members of a group to obtain and accept information about reality.

Foot-In-The-Door

A psychological technique where getting a person to agree to a small request increases the likelihood they will agree to a larger request later.

Social Loafing

The phenomenon where individuals exert less effort to achieve a goal when they work in a group than when they work alone.

Groupthink

A phenomenon in group decision-making where the desire for harmony or conformity results in an irrational or dysfunctional outcome.