AC Heating & Cooling Uses the Indirect Method to Prepare

question 19

Multiple Choice

AC Heating & Cooling uses the indirect method to prepare the statement of cash flows.During 2X03,AC Heating & Cooling had $100,000 in net income,which included a gain of $10,000 from the sale of a plant asset.To calculate operating cash flows,AC Heating & Cooling must

• A)deduct $10,000 from net income in the operating activities section of the statement of cash flows.
• B)add $10,000 to net income in the operating activities section of the statement of cash flows.
• C)deduct $10,000 from net income in the investing section of the statement of the statement of cash flows.
• D)add $10,000 to net income in the investing section of the statement of cash flows.
• E)deduct $10,000 from net income in the financing section of the statement of cash flows.

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Definitions:

Production Possibilities Curve

A graphical representation showing the maximum quantity of goods and services that an economy can produce when all resources are fully employed.

Education Level

A measurement of the highest stage or degree of formal learning or training that an individual has completed.

Labor Force

Refers to the total number of people, including both the employed and the unemployed, who are currently available to engage in the production of goods and services in an economy.

Entrepreneurs

Individuals who start, organize, manage, and assume the risk for a business venture.