(Appendix) When Preparing a Schedule for the Calculation of Cash

question 3

Multiple Choice

(Appendix) When preparing a schedule for the calculation of cash generated from operating activities under the direct method, a decrease in Accounts Receivable is

• A) added to net sales.
• B) subtracted from net sales.
• C) added to operating expenses.
• D) subtracted from cost of goods sold.

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Definitions:

Dividend Increase

A rise in the amount of money paid to shareholders out of a company's earnings per share.

Annual Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits on a yearly basis.

Dividends Increase

An action by a company to increase the amount of dividends paid to shareholders, typically signaling confidence in the company's profitability.

Rate of Return

The success or failure of an investment over a determined timeframe, depicted as a percentage of the investment’s original stake.