According to the Statement of Cash Flows,a Decrease in Accounts

question 15

Multiple Choice

According to the Statement of Cash Flows,a decrease in accounts receivable will _____ the cash flow from _____ activities.

• A)decrease; operating
• B)decrease; financing
• C)increase; operating
• D)increase; financing
• E)increase; investment

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Definitions:

Fair Value

A measurement of the price at which an asset could be bought or sold, or a liability settled, in a current transaction between willing participants in the market.

Economic Life

The estimated period over which an asset is expected to be economically usable by one or more users, with profitability considered.

Residual Value

The estimated value that an asset will realize upon the end of its useful life, often used in calculating depreciation.

Straight-Line Method

A depreciation method that allocates the cost of an asset evenly over its useful life.