Assume That the Balance of Accounts Payable Does Not Change

question 13

Multiple Choice

Assume that the balance of accounts payable does not change during a period.When preparing a statement of cash flows,an increase in ending inventory over beginning inventory will result in an adjustment to net income under the indirect approach because

• A)the amount of cost of goods sold is equal to the amount of cash paid for purchases.
• B)consumed inventory is an expense but not a use of funds.
• C)the amount of cost of goods sold on an accrual basis is less than the amount of cash paid for purchases of inventory.
• D)the amount of cash paid for purchases of inventory is less than the amount of cost of goods sold on an accrual basis.

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Definitions:

Innovation

The introduction of something new, such as an idea, method, technology, or product, that creates value or makes significant improvements over existing solutions.

Business Mortality

The concept or rate at which businesses fail or cease operations, often used in studies of business lifespan and success factors.

Moderate Success

Achieving some level of achievement or progress that is considered satisfactory but not outstanding.

Strategic Mistakes

Errors in judgment or poor decision-making in planning and implementing strategies that negatively impact an organization's success.