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A Company Uses the Indirect Method to Prepare the Statement

question 115

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A company uses the indirect method to prepare the statement of cash flows.It presents the following data on its financial statements:
A company uses the indirect method to prepare the statement of cash flows.It presents the following data on its financial statements:   *Relates solely to the acquisition of inventory What will appear in the operating activities section related to inventory? A) The decrease of $15,000 will be subtracted from net income. B) The decrease of $15,000 will be subtracted from cost of goods sold. C) The decrease of $15,000 will be added to net income. D) The decrease of $15,000 will be added to cost of goods sold.
*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to inventory?

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Definitions:

Current Costs

The costs or expenses associated with the acquisition, production, or maintenance of assets and services at present market prices.

Freight Charges

Fees associated with the transportation of goods over distance, typically paid by the shipper or receiver.

Inventory Ownership

Refers to having legal title to goods and merchandise stored within a firm's warehouse or storage facility.

Weighted Average

It's a calculation that takes into account the varying degrees of importance of the numbers in a data set, often used in determining the cost of inventory.

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