Which of the Following Statements Is CORRECT

question 134

Multiple Choice

Which of the following statements is CORRECT?

• A) In the statement of cash flows,a decrease in accounts receivable is subtracted from net income in the operating activities section.
• B) Dividends do not show up in the statement of cash flows because dividends are considered to be a financing activity,not an operating activity.
• C) In the statement of cash flows,a decrease in accounts payable is subtracted from net income in the operating activities section.
• D) In the statement of cash flows,depreciation is subtracted from net income in the operating activities section.
• E) In the statement of cash flows,a decrease in inventories is subtracted from net income in the operating activities section.

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Definitions:

Consumption

refers to the total amount of goods and services bought and used by households and individuals.

Savings Rate

The portion of disposable income not spent on consumption of goods and services but saved or invested, usually expressed as a percentage of disposable income.

Consumption

Consumption refers to the use of goods and services by households for personal satisfaction or living standards.

Credit Availability

Refers to the ease with which individuals or businesses can obtain loans or credit from financial institutions.