Using the Indirect Method, Cash Flows from Operating Activities Would

question 31

Multiple Choice

Using the indirect method, cash flows from operating activities would be increased by which of the following?

• A) Gain on sale of investments
• B) Increase in prepaid expenses
• C) Decrease in accounts payable
• D) Decrease in accounts receivable

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Definitions:

Total Revenue

The total amount of money received by a company from its sales of goods or services.

Marginal Revenue Product

The additional revenue generated from hiring one more unit of labor or other input.

Complementary Inputs

Goods or services that are used together in production and whose use is interconnected, such that an increase in demand for one increases the demand for the other.

Marginal Physical Product

The marginal physical product is the change in output resulting from employing one more unit of a particular input, holding other inputs constant.