When Using the Indirect Method in the Statement of Cash

question 21

True/False

When using the indirect method in the statement of cash flows, the company would add the net change in a current liability account if the balance increased over time.

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Definitions:

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not related to the day-to-day operations.

Net Cash Provided

The sum of cash inflows minus cash outflows over a period, typically highlighted in a company’s cash flow statement.

Market Securities

Financial instruments that are traded in financial markets, such as stocks, bonds, and derivatives, representing investment vehicles for owners.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowed funds of a business.