The Comparative Balance Sheets of Midnite Corp

question 17

Multiple Choice

The comparative balance sheets of Midnite Corp.for 2015 and 2014 indicate that short-term trade notes receivable increased from $5,000 in 2014 to $75,000 in 2015.How will this change be reported on Midnite's statement of cash flows, if Midnite uses the indirect method?

• A)It will be included in the amount of cash and cash equivalents at the end of 2015.
• B)It will be reported as a deduction from net income in the operating activities section.
• C)It will be reported as a cash outflow in the investing activities section.
• D)It will be added to net income in the operating activities section.

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Definitions:

Open System

A social system with ample opportunities to move from one class to another.

Closed System

A physical system that does not allow certain types of transfers (such as transfer of mass) in or out of the system.

Structural Mobility

The mobility of individuals or groups within or between social strata, facilitated by changes in the economy or the social structure of a society, rather than by personal achievement.

Social Class Ladder

A metaphorical representation of the stratification and hierarchical nature of society based on socio-economic status.