Which of the Following Statements Are False When Using the Indirect

question 58

Multiple Choice

Which of the following statements are false when using the indirect method?

• A) A loss on the sale of equipment is added to net income in calculating cash provided by operating activities.
• B) An increase in accounts receivable during a period is deducted from net income in calculating cash provided by operating activities.
• C) An increase in accounts payable during a period is added to net income in calculating cash provided by operating activities.
• D) A decrease in accumulated depreciation during a period is added to net income in calculating cash provided by operating activities.

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Definitions:

Real Per Capita GDP

The measure of a country's economic output that accounts for its number of people and adjusts for inflation, indicating the average economic well-being of its citizens.

Net Exports

The value obtained by subtracting a country's total value of imports from its total value of exports, representing a component of a country's GDP.

Real GDP

Real GDP measures the value of all final goods and services produced within a country's borders in a given time period, adjusted for inflation.

GDP Deflator

An index reflecting the price levels for all newly produced, domestic, final goods and services within a country.