Presented Below Is the Operating Activities Section of the Statement

question 154

Multiple Choice

Presented below is the operating activities section of the statement of cash flows for Golden Consulting for 2016: $\begin{array}{lr}\text { Operating activities: }\\\text { Net income } & \$ 92,000 \\\text { Add: Depreciation } & 20,000 \\\text { Decrease in accounts receivable } & 8,000 \\& \$ 120,000 \\\text { Deduct: Decrease in accounts payable } & \$(6,000) \\\text { Net cash inflow from operating activities } & \$ 114,000\end{array}$ Which method of preparing the operating activities section has Golden Consulting used?

• A) The direct method.
• B) The indirect method.
• C) Either method.
• D) Cannot be determined without further information.

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Definitions:

Orbits Around

The path of a celestial body as it moves through space under the influence of another body's gravitational force.

Cassini Spacecraft

A robotic spacecraft sent by NASA to study the planet Saturn and its system, including its rings and natural satellites.

Huygens Probe

A space probe that landed on Titan, Saturn's largest moon, in 2005 to study its surface and atmosphere.

Impact Craters

Circular depressions formed by the collision of a meteorite, asteroid, or comet with the Earth's surface.