In Calculating Cash Flows from Operating Activities Using the Indirect

question 172

Multiple Choice

In calculating cash flows from operating activities using the indirect method, an increase in inventories is

• A) added to net income.
• B) deducted from net income.
• C) ignored because it does not affect cash.
• D) not reported on a statement of cash flows.

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Definitions:

Genetic Pollution

The uncontrolled spread of genetic material, particularly modified or foreign genes, which can lead to unintended changes in populations of wild organisms.

Environmental Racism

involves race-based environmental inequity, where minority communities face disproportionate exposure to pollution and environmental hazards compared to more affluent, predominantly white areas.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its short-term assets.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, indicating the company's profitability.