When Preparing the Operating Section of the Statement of Cash

question 100

Multiple Choice

When preparing the operating section of the statement of cash flows using the indirect method, which of the following items are added to net income?

• A) decrease in accounts payable
• B) unrealized gains on trading securities
• C) loss on sale of equipment
• D) increase in merchandise inventory

---

Definitions:

Common Law

A set of uncodified laws derived from judicial decisions and court judgments.

Procedural Unconscionability

A situation where the terms of a contract are unfair or oppressive because of the process involved in the agreement formation, including lack of negotiation power or misleading terms.

Fine Print

Small, difficult to read text in contracts or advertisements that often contains important information about limitations, exclusions, or conditions.

Legislative Rules

Regulations and guidelines established by legislatures that govern the process and conduct of legislative bodies.