On a Statement of Cash Flows Prepared Using the Indirect

question 61

Multiple Choice

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

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

---

Definitions:

T-Bill Rate

The yield on U.S. Treasury bills, which are short-term government securities, serving as a benchmark for short-term interest rates.

Covariances

Covariance is a measure used in statistics to determine how much two random variables vary together.

Portfolio Variance

A measurement of the dispersion of returns of a portfolio, indicating the degree of investment risk.

Risky Securities

Financial instruments that carry a higher degree of uncertainty and a higher risk of loss, such as stocks.