If the Indirect Method Is Used to Prepare a Statement

question 103

Multiple Choice

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

• A) Decrease in accrued liabilities
• B) Gain on sale of investments
• C) Decrease in prepaid expenses
• D) Increase in accounts receivable

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Definitions:

Philosophy

The study of fundamental questions related to existence, knowledge, values, reason, mind, and language.

Practical Thought

Reasoning focused on dealing with specific tasks, solving practical problems, and making decisions based on real-life contexts and experiences.

Dualistic

Relating to the concept or belief in two fundamentally opposing principles, such as good and evil.

Autonomous

Refers to the ability to act independently, making decisions and performing actions without external control or influence.