Which of the Following Statements Is True When Using the Indirect

question 220

Multiple Choice

Which of the following statements is true when using the indirect method of preparing the operating activities section of the statement of cash flows?

• A) Inventory decreases are subtracted from net income.
• B) Inventory increases are subtracted from net income.
• C) Inventory increases are added to net income.
• D) None of the above.

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Definitions:

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A fee charged by a company for servicing an account, loan, or investment, covering the costs of maintaining the account or investment.

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A conflict of interest arising between principals, such as shareholders, and agents, such as company executives, due to differing goals.

Study of Finance

The discipline that concerns the management, creation, and study of money, banking, credit, investments, assets, and liabilities.