Using the Indirect Method, Where Does the Decrease in Accounts

question 101

Multiple Choice

Using the indirect method, where does the decrease in accounts receivable appear in a consolidated statement of cash flows?

• A) $8,000 increase to net income as an operating activity.
• B) $8,000 decrease to net income as an operating activity.
• C) $6,400 increase to net income as an operating activity.
• D) $6,400 decrease to net income as an operating activity.
• E) $8,000 increase as an investing activity.

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Definitions:

Sellers

Persons or organizations that provide products or services to buyers or other commercial entities.

Labor Market

The market in which individuals offer their labor to employers in exchange for wages, salaries, or other forms of compensation.

Labor Supply

The complete count of hours that individuals in the workforce are willing to contribute and can work, at a determined rate of remuneration.

Labor Demand

Labor demand represents the total amount of workers that employers are willing and able to hire at a given wage rate in a particular market.