Assume the Indirect Method Is Used to Compute Net Cash

question 75

Multiple Choice

Assume the indirect method is used to compute net cash flows from operating activities.For this item extracted from the financial statements-Depreciation Expense-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

• A) Add to net income to arrive at net cash flows from operating activities
• B) Subtract from net income to arrive at net cash flows from operating activities
• C) Not used to adjust net income to calculate net cash flows from operating activities

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Definitions:

CFCs

Chlorofluorocarbons, a class of chemicals used in refrigerants and aerosol propellants, known to contribute to ozone layer depletion.

Upper Atmosphere

The region of Earth's atmosphere that is above the troposphere, including the stratosphere, mesosphere, thermosphere, and exosphere.

A/C Circuit

A closed path designed for the flow of electrical current to operate air conditioning systems, including components such as compressors, motors, and capacitors.

Coldest Point

The location within a system, often in refrigeration, where the temperature is the lowest.