A Company Uses the Indirect Method to Prepare the Statement

question 3

Multiple Choice

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 salary payable?

• A)The increase of $2,000 will be added to cost of goods sold.
• B)The increase of $2,000 will be added to net income.
• C)The increase of $2,000 will be subtracted from cost of goods sold.
• D)The increase of $2,000 will be subtracted from net income.

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