Flannery Company Uses a Worksheet to Prepare Its Statement of Cash

question 47

Multiple Choice

Flannery Company uses a worksheet to prepare its statement of cash flows.The company also uses the indirect method for the Operating Activities section of its statement.For each of the following changes in the balance sheet, indicate what activity it affects and whether it is an addition or deduction.
-Income taxes payable increased

• A)Deducted from Operating activity
• B)Added to Operating activity
• C)Deducted from Investing activity
• D)Added to Investing activity
• E)Deducted from Financing activity
• F)Added to Financing activity

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Definitions:

Contra

Contra refers to an account that is used to reduce another account on the financial statements to its net value.

Plant Asset

Long-term tangible assets used in the operation of a business and not intended for resale, such as machinery, buildings, and vehicles.

Loss

The negative result when expenses exceed revenues during a specific period.

Sale

The exchange of goods or services for money or other compensation, forming the primary revenue-generating activity of a business.