When Using the Indirect Method to Prepare the Operating Section

question 65

Multiple Choice

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

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

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Definitions:

Contradictions

Statements or propositions that directly oppose each other, indicating a discrepancy in reasoning or facts.

Belief System

A set of principles or tenets which together form the basis of a religion, ideology, or personal stance.

Ideological Argument

An argument that is primarily based on a set of beliefs or ideologies rather than empirical evidence or logical reasoning.

Premises

Statements or propositions from which a conclusion is drawn in logical reasoning.