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:

Waste Management

The collection, transport, processing, recycling, and disposal of waste materials in a manner that is in accordance with health, conservation, and aesthetic considerations.

Industrial Discharge Permit

A government authorization for a business to release specified amounts and types of waste into the environment.

Publicly Owned Treatment Works

Facilities owned by a state or municipality that are designed to treat municipal sewage or industrial wastewater.

Ocean Dumping

The disposal of waste materials directly into the ocean, often regulated to prevent environmental harm.