A Company Uses the Indirect Method to Prepare the Statement

question 78

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 accounts payable?

• A)The increase of $10,000 will be subtracted from net income.
• B)The increase of $10,000 will be added to net income.
• C)The increase of $10,000 will be subtracted from cost of goods sold.
• D)The increase of $10,000 will be added to cost of goods sold.

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Definitions:

Mixed-motive Situation

A scenario in decision-making where the interests of the participants overlap in some areas and conflict in others, leading to complex interactions.

Goal Structures

The organization and arrangement of objectives that guide individuals' or groups' behavior towards achieving desired outcomes.

Cooperate

The act of working together toward a common goal or interest.

Intergroup Conflict

A psychological phenomenon where conflict occurs between groups due to competing interests, beliefs, or resources.