Which Statement Is False Regarding the Preparation of the Indirect

question 60

Multiple Choice

Which statement is false regarding the preparation of the indirect method of the statement of cash flows? 

• A) An increase in merchandise inventory is subtracted from net income.
• B) Depreciation expense is added to net income.
• C) An increase in accounts receivable is added to net income.
• D) An increase in accounts payable is added to net income.

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Definitions:

Tractors

Motor vehicles specifically designed for the purpose of agricultural tasks, including plowing, tilling, and planting fields.

Motorcycles

Two-wheeled vehicles powered by an engine, often used for transportation and recreational purposes.

Opportunity Cost

The value of the best alternative that is forgone when a particular decision is made.

Specialization

The process by which individuals, businesses, or countries focus on producing a narrow range of products or services to gain greater efficiencies.