An Increase in Accrued Liabilities of $1,000 During a Year

question 49

Multiple Choice

An increase in accrued liabilities of $1,000 during a year would be shown on the company's statement of cash flows prepared under the indirect method as:

• A) an addition to net income of $1,000 in order to arrive at net cash provided by operating activities.
• B) a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
• C) a deduction of $1,000 under investing activities.
• D) an addition of $1,000 under financing activities.

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Definitions:

Keynesian Theory

An economic theory stating that government intervention through fiscal policy is necessary to manage aggregate demand and address unemployment and recession.

Say's Law

An economic theory stating that supply creates its own demand, suggesting that producing goods and services generates the means and the willingness to purchase other goods.

Demand-Oriented

Demand-Oriented is an approach or policy focused on increasing consumer demand to stimulate production and economic growth.

Aggregate Supply

The overall quantity of goods and services that businesses in an economic system aim to sell within a certain period.