When Using the Indirect Method to Prepare the Operating Section

question 13

Multiple Choice

When using the indirect method to prepare the operating section of a statement of cash flows, which of the following is added to net income to compute cash provided by/used by operating activities?

• A)Increase in accounts receivable.
• B)Gain on sale of land.
• C)Amortization of patent.
• D)All of these answer choices are added to net income to arrive at cash flow from operating activities.

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Definitions:

Brick-and-mortar

Refers to physical stores or businesses that have a tangible presence in the form of a building where customers can visit.

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A business establishment where meals or refreshments can be purchased and consumed by the public.

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A Chinese multi-purpose messaging, social media, and mobile payment app developed by Tencent, offering a wide range of services and functionalities.

Social Media

Platforms and websites that enable users to create and share content or participate in social networking with others.