On a Statement of Cash Flows Prepared Using the Indirect

question 133

Multiple Choice

On a statement of cash flows prepared using the indirect method, an increase in Accounts Payable during the period is:

• A)deducted from net income to determine net cash provided by operating activities.
• B)added to net income to determine net cash provided by financing activities.
• C)added to net income to determine net cash provided by operating activities.
• D)deducted from net income to determine net cash provided by financing activities.

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Definitions:

Return On Total Assets

A financial ratio that measures the efficiency of a company's assets in generating profit, calculated by dividing net income by total assets.

Earnings Per Share

A financial metric that measures the profitability of a company on a per-share basis, calculated by dividing the company's net income by its total number of outstanding shares.

Return On Total Assets

A financial ratio that measures a company's profitability relative to its total assets.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.