A Decrease in the Inventory Account During the Year Should

question 63

Multiple Choice

A decrease in the inventory account during the year should be reported on the indirect method statement of cash flows as:

• A)An increase in cash flows from operating activities
• B)An increase in cash flows from investing activities
• C)A decrease in cash flows from operating activities
• D)A decrease in cash flows from investing activities
• E)An increase in cash flows from financing activities

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Definitions:

Goal Congruence

A condition in which the goals of the company's various employees and departments align with the overall objectives of the organization.

Motivation

The internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job or subject.

Suboptimal Decision

A choice made that is not the best or most effective among the alternatives considered.

Transfer Pricing

The setting of prices for transactions between affiliated companies within the same multinational group, which can impact where profits are reported.