In Calculating Net Cash Provided by Operating Activities Using the Indirect

question 189

Multiple Choice

In calculating net cash provided by operating activities using the indirect method an increase in prepaid expenses during a period is

• A) deducted from net income.
• B) added to net income.
• C) ignored because it does not affect income.
• D) ignored because it does not affect expenses.

---

Definitions:

Unemployment Rate

The proportion of people in the workforce who are unemployed and seeking work actively.

Employed

The state of having a paid job or being engaged in a profitable activity.

Unemployed

Individuals who are willing and able to work but cannot find employment.

Inflation Rate

measures the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.