Avatar Company Uses the Indirect Method to Prepare the Statement

question 77

Multiple Choice

Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following section of the comparative balance sheet:
$$\begin{array} { | l | r | r | r | } \hline&2014 & 2013 & \text { Increase/decrease }\\\hline \text { Accounts payable } & \$ 4,000 & \$ 6,000 & \$ ( 2,000 ) \\\hline \text { Accrued liabilities } & 2,000 & 1,000 & 1,000 \\\hline \text { Long-term notes payable } & 84,000 & 90,000 & ( 6,000 ) \\\hline \text { Total liabilities } & \$ 90,000 & \$ 97,000 & \$ ( 7,000 ) \\\hline\end{array}$$

-
How will the change in Accounts payable be shown on the statement of cash flows?

• A) Operating activities minus positive cash flow
• B) Operating activities minus negative cash flow
• C) Financing activities minus positive cash flow
• D) Investing activities minus negative cash flow

---

Definitions:

Resilience

The capacity to recover quickly from difficulties; toughness or the ability to bounce back from adversity.

Realistic Expectations

Refers to setting goals or targets that are achievable and grounded in reality, taking into account current resources, limitations, and circumstances.

Job Satisfaction

The level of contentment employees feel with their job, which can affect productivity and turnover rates.

Liver Degeneration

The gradual deterioration of liver function, often due to chronic injury or disease, affecting the liver's ability to perform its vital tasks.