On the Statement of Cash Flows Using the Indirect Method

question 150

Multiple Choice

On the statement of cash flows using the indirect method patent amortization expense will

• A) be added to net income in the operating section.
• B) be deducted from net income in the operating section.
• C) appear as an inflow of cash in the investing section.
• D) appear as an outflow of cash in the investing section.

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Definitions:

Extraordinary Repairs

Significant expenditures that extend the useful life of an asset, improve its efficiency, or restore its capacity, distinguished from routine maintenance.

Grading

The process of assessing or classifying the quality, size, or performance of different items or individuals.

Land Improvements

Land improvements include alterations or enhancements made to a piece of land to increase its value or utility, such as landscaping or adding parking lots.

Buildings

Fixed assets that refer to structures used for business operations, such as offices, factories, and warehouses, represented on the balance sheet and subject to depreciation.