When Using the Indirect Method to Complete the Cash Flows

question 13

Multiple Choice

When using the indirect method to complete the cash flows from operating activities section,what is the proper treatment for an increase in the accounts receivableAccounts Receivable balance?

• A) Add the increase to net income
• B) Add the increase to cash collections from customers
• C) Deduct the increase from net income
• D) Add the increase to cash payments to suppliers

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Definitions:

Innovations

New ideas, devices, or methods that improve something or introduce significant positive change.

Knowing-Doing Gap

The discrepancy between what people know they should do and what they actually do in practice.

Managers

Individuals within an organization responsible for directing, controlling, and administering work groups or departments to achieve the organization's objectives.

Knowledge

Information, understanding, and skills acquired through experience or education, allowing individuals to navigate various situations.