Avatar Company Uses the Indirect Method to Prepare the Statement

question 47

Multiple Choice

Avatar Company uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: How will the change in Accrued Liabilities be shown on the statement of cash flows?

• A)as an addition to Net Income
• B)as a deduction from Net Income
• C)as a deduction from operating cash flows
• D)as an addition to operating cash flows

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Definitions:

Money Orders

Payment orders for a specified amount of money that are a secure alternative to cash or personal checks.

UCC

Refers to the Uniform Commercial Code, a set of laws governing sales and commercial transactions in the United States.

Checks

Banking instruments that order a bank to pay a specific amount of money from the writer's account to the person or entity in whose name the check has been issued.

Postdate

To mark or assign a date to a document or check that is later than the actual date.