If the Indirect Method Is Used to Prepare a Statement

question 4

Multiple Choice

If the indirect method is used to prepare a statement of cash flows,which of the following would be deducted from net income to arrive at net cash flows from operating activities?

• A) Increase in accounts payable
• B) Increase in income taxes payable
• C) Increase in accounts receivable
• D) Decrease in prepaid rent

---

Definitions:

Collective Bargaining

The negotiation process between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, and other aspects of workers' compensation and rights.

Union Wages

The level of compensation agreed upon through collective bargaining between labor unions and employers, often resulting in higher wages and better benefits for union workers compared to their non-union counterparts.

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, for the services of an employee.

Labor-market Discrimination

Differences in pay, employment opportunities, or treatment between workers based on race, gender, age, religion, or other non-skill related factors.