The Following Information Was Taken from the Operating Activity Section

question 145

Multiple Choice

The following information was taken from the operating activity section of the 2014 statement of cash flows for Limited Corp: Based on the information provided, which one of the following conclusions is correct?

• A)Accounts payable decreased $2,000 in 2014.
• B)Inventories increased $8,000 in 2014.
• C)The direct method was used to prepare the operating section of the cash flow statement.
• D)Cash payments of merchandise exceeded cost of goods sold by $2,000.

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Definitions:

Market Price

The existing rate at which a service or commodity can be acquired or disposed of.

Earnings Per Share

The portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.

Corporate Income Statement

is a financial document that outlines a corporation’s revenues, expenses, and profits or losses over a specific period.

Income From Continuing Operations

The earnings generated from a company's ongoing core business operations, excluding extraordinary items.