The Comparative Balance Sheets of Midnite Corp

question 157

Multiple Choice

The comparative balance sheets of Midnite Corp.for 2017 and 2016 indicate that short-term trade notes receivable increased from $5,000 in 2016 to $75,000 in 2017.How will this change be reported on Midnite's statement of cash flows, if Midnite uses the indirect method?

• A) It will be included in the amount of cash and cash equivalents at the end of 2017.
• B) It will be reported as a deduction from net income in the operating activities section.
• C) It will be reported as a cash outflow in the investing activities section.
• D) It will be added to net income in the operating activities section.

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Definitions:

MRO

Maintenance, repair, and operating materials.

MRO Inventories

MRO Inventories refer to stocks of Maintenance, Repair, and Operations supplies that are kept on hand to support the production process and facility operations.

ABC Inventory Analysis

A technique that categorizes inventory items into three classes (A, B, and C) based on their importance and value to the organization, to prioritize management and control efforts.

ABC Analysis

is an inventory categorization technique that divides items into three categories (A, B, and C) based on their importance or value, helping to prioritize management and resource allocation.