A Company Uses the Indirect Method to Prepare the Statement

question 8

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 receivable?

• A)The increase of $15,000 will be subtracted from net income.
• B)The increase of $15,000 will be added to net income.
• C)The increase of $15,000 will be added to sales revenue.
• D)The increase of $15,000 will be subtracted from sales revenue.

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Definitions:

Organic Material

Matter obtained from living organisms, typically consisting of compounds like carbohydrates, proteins, lipids, and nucleic acids.

Blast Wave

A high-energy shock wave resulting from an explosion, characterized by an abrupt increase in pressure and velocity of the surrounding medium.

Electromagnetic Wave

Waves of the electromagnetic field, propagating through space, carrying electromagnetic radiant energy.

Plastic Explosives

A type of explosive material that is moldable or flexible, used in military and demolition applications.