A Company Uses the Indirect Method to Prepare the Statement

question 34

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows. It presents the following amounts on its financial statements. *Relates solely to the acquisition of inventory
What will appear in the operating activities section related to salary payable?

• A)The decrease of $3,000 will be added to net income.
• B)The decrease of $3,000 will be added to cost of goods sold.
• C)The decrease of $3,000 will be subtracted from cost of goods sold.
• D)The decrease of $3,000 will be subtracted from net income

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Definitions:

Expected Rate Of Return

The profit or loss one anticipates on an investment that has various known or expected rates of return.

Total Investment

The sum of all monetary resources allocated into various assets, projects, or securities at a given time.

Expected Rate Of Return

The average of all possible returns for an investment, weighted by the likelihood of each outcome.

Total Investment

The total amount of money spent on acquiring or improving productive assets or investments over a period.