The Following Items Were Reported on the Balance Sheets and Income

question 27

Multiple Choice

The following items were reported on the balance sheets and income statement for Bezos Corp.: How would the change in accounts payable be reported in the operating activities section of the statement of cash flows under the indirect method?

• A)As an addition to operating expenses
• B)As a deduction from operating expenses
• C)As an addition to net income
• D)As a deduction from net income

---

Definitions:

Journal Entries

Records of financial transactions in an accounting system, indicating the accounts and amounts affected.

Salvage Value

The estimated residual value of an asset at the end of its useful life, reflecting what a company expects to recover once the asset is no longer useful.

Useful Life

The estimated duration a fixed asset is expected to be economically usable by a company, affecting depreciation calculations.

Amortization Expense

Amortization Expense refers to the systematic allocation of the cost of intangible assets over their useful lives.