When Using the Indirect Method, How Is the Decrease in Accounts

question 202

Multiple Choice

When using the indirect method, how is the decrease in accounts payable shown on the statement of cash flows?

• A) Operating activity
• B) Investing activity
• C) Financing activity
• D) Noncash investing and financing activity

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Definitions:

Behavioral Economists

Economists who study the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.

System 2

A concept from cognitive psychology that refers to the deliberate, analytical, and slow way of thinking, as opposed to quick, instinctual decisions.

Endowment Effect

The tendency for people to value something more highly simply because they own it.

Behavioral Economics

A field of economics that studies how psychological, social, cognitive, and emotional factors affect the economic decisions of individuals and institutions and the consequences for market prices, returns, and resource allocation.