When an Entry Is Made to Adjust the Supplies Account

question 104

Multiple Choice

When an entry is made to adjust the supplies account and recognize supplies expense for the period, which section of the statement of cash flows is affected?

• A) Cash Flow from Operating Activities
• B) Cash Flow from Investing Activities
• C) Cash Flow from Financing Activities
• D) There is no effect on the statement of cash flows.

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Definitions:

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit.

Quarter

One fourth of a given quantity, often referring to a quarter of a year or a quarter of an hour (15 minutes).

Percent Decrease

A measure of how much a quantity has decreased in percentage terms compared to its previous value.

Percent Increase

The process of determining the ratio of the increase in a quantity to the original amount, expressed as a percentage.