Howard Company Uses the Direct Method to Prepare Its Operating

question 66

Essay

Howard Company uses the direct method to prepare its operating activities section of the statement of cash flows.
Indicate how each event affects net income and the three types of activities on the statement of cash flows. In the net income column, use the letter "I" to indicate increase, the letter "D" to indicate decrease, and the letters "NA" to indicate that the income statement is not affected. In the three cash flow columns, use the letter "I" to indicate cash inflow, the letter "D" to indicate cash outflow, and the letters "NA" to indicate that the cash flow statement is not affected.
On July 6, Year 1, Howard Company received an interest check relating to a note receivable. The interest revenue had not been previously accrued.

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Definitions:

HDC Status

An abbreviation for Holder in Due Course Status, it refers to a legal shield that provides protection for the possessor of a negotiable instrument from certain defenses if the instrument was acquired in good faith.

Irregularity

A deviation from what is standard, normal, or expected, often indicating a potential issue or problem.

Forged Maker's Signature

An illegal alteration or the unauthorized signing of a document by someone other than the individual purportedly doing the signing.

Antedated

Refers to something that precedes another thing in time, especially a document or statement that bears a date earlier than the actual date of execution.