Adama Company Reported a Net Loss of $6,000 for the Year

question 39

Multiple Choice

Adama Company reported a net loss of $6,000 for the year ended December 31, 2017. During the year, accounts receivable increased $15,000, inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded. During 2017, operating activities

• A) used net cash of $17,000.
• B) used net cash of $29,000.
• C) provided net cash of $24,000.
• D) provided net cash of $21,000.

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Definitions:

Varying Percent

Describes the difference in percentage rates, often used in finance and statistics, to compare changes over time or between different entities.

Experience Curve

A concept indicating that as a company gains experience in producing a product, its cost of production decreases due to efficiencies and learning effects.

Improve Its Experience Curve

Efforts to lower costs and improve efficiency as a company gains experience in production and operations.

Experience Curve Concept

The principle that the cost of production decreases as a company gains more experience in manufacturing a particular product, due to efficiencies and learning.