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:

Significance Level

The threshold below which a p-value is considered statistically significant, commonly set at 0.05.

Predicting

The act of forecasting future events or trends based on current or historical data.

Final Grade

The cumulative score or assessment representing a student's performance across an academic term, semester, or course.

Significance Level

The risk of erroneously declining the null hypothesis in statistical evaluation, commonly marked by alpha.