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:

Self-sufficiency

The ability of an individual, community, or nation to provide for its own needs without relying on external assistance.

Generous Level

A term not typically used in a specific technical context but generally refers to an amount or degree of something that is ample or more than adequate.

Two-tier Welfare

A welfare system structured on two levels, where basic universal benefits are provided, and additional supports can be accessed based on specific eligibility criteria.

Assistance

Aid or support provided to individuals, groups, or countries in the form of financial resources, expertise, or other resources, aimed at achieving specific goals or relieving hardships.