Assuming the Indirect Method for Preparing the Statement of Cash

question 115

Multiple Choice

Assuming the indirect method for preparing the statement of cash flows is used, indicate whether these items should be added to net income (A) , deducted from net income (D) , or not be reported in the operating section of the statement under the indirect method (NR) .
-Decrease in prepaid insurance

• A)Added (A)
• B)Deducted (D)
• C)Not reported (NR)

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Definitions:

Exchange Rates

The value of one currency for the purpose of conversion to another, affecting how international transactions are recorded.

British Pounds

Refers to the official currency of the United Kingdom, known for its symbol £ and its code GBP.

Sales Credited

This refers to the revenue recorded when sales transactions are made, often impacting the seller's financial statements positively.

Spot Rate

The present market rate at which a specific currency is available for purchase or sale for on-the-spot delivery.