When Preparing a Statement of Cash Flows (Indirect Method), an Increase

question 105

Multiple Choice

When preparing a statement of cash flows (indirect method) , an increase in ending inventory over beginning inventory will result in an adjustment to reported net earnings because

• A) cash was increased while cost of goods sold was decreased.
• B) cost of goods sold on an accrual basis is lower than on a cash basis.
• C) acquisition of inventory is an investment activity.
• D) inventory purchased during the period was less than inventory sold resulting in a net cash increase.

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Definitions:

Major Service Organizations

Non-profit organizations that provide support, advocacy, and services to specific groups, often including veterans, and play significant roles in community building and social support.

Hierarchy of Authority

A rank order of authority within an organization, establishing clear paths of responsibility and reporting.

Bureaucrat

An official in a governmental or corporate institution, often perceived as being concerned with procedural correctness at the expense of people's needs.

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