If a Company Uses the Indirect Method to Prepare the Statement

question 27

Multiple Choice

If a company uses the indirect method to prepare the statement of cash flows, how will the adjustment to reflect the amount of cash received from customers be presented on the statement?

• A)The adjustment will be for the increase or decrease in inventory during the period and will adjust net income in the operating activities section on the statement of cash flows.
• B)The adjustment will be for the increase or decrease in accounts payable during the period and will adjust net income in the operating activities section on the statement of cash flows.
• C)The adjustment will be for the increase or decrease in accrued expenses during the period and will adjust net income in the operating activities section on the statement of cash flows.
• D)The adjustment will be for the increase or decrease in accounts receivable during the period and will adjust net income in the operating activities section on the statement of cash flows.

Master the use of Excel's Auto Fill options to efficiently fill data series and apply formatting.

Recognize and apply the correct method to keep cell references constant using absolute referencing.

Understand the concept of sensitivity or what-if analysis in Excel.

Identify and correct common error indicators in Excel, such as ###### or #NAME?.

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Definitions:

Generality

The quality or state of being widespread or universally applicable, often used to describe observations or theories that are considered to be true under numerous conditions and contexts.

Findings

The outcomes, results, or conclusions reached through research, experimentation, or analysis in various fields of study.

Inferential Statistics

A branch of statistics that allows one to make predictions or inferences about a population based on a sample of data drawn from that population.

Statistics

The branch of mathematics dealing with data collection, analysis, interpretation, and presentation.