Assume the Indirect Method Is Used to Compute Cash Flows

question 157

Short Answer

Assume the indirect method is used to compute cash flows from operations. For each item listed below, indicate the effect on net income in arriving at cash flows from operations by choosing one of the following code letters.
1. Increase in accounts receivable
2. Increase in inventory
3. Decrease in prepaid expenses
4. Decrease in accounts payable
5. Increase in accrued liabilities
6. Increase in income taxes payable
7. Depreciation expense
8. Loss on sale of investment
9. Gain on disposal of equipment
10. Amortization expense

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Definitions:

Calcaneus

The largest bone in the foot, forming the heel and serving as a foundation for the rear part of the foot.

Lateral Collateral Ligament

A ligament located on the outer side of the knee, contributing to the joint's stability by preventing lateral (sideways) movement.

Cruciate Ligaments

Major ligaments in the knee that cross each other, crucial for stabilizing the knee joint during movement.

Calcaneofibular Ligament

A ligament located in the foot that connects the fibula (smaller bone in the lower leg) to the calcaneus (heel bone), involved in stabilizing the ankle.