If a Company Uses the Indirect Method to Prepare the Statement

question 154

Multiple Choice

If a company uses the indirect method to prepare the statement of cash flows, how would the adjustment to reflect the amount of cash payments to employees be presented on the statement of cash flows?

• A)The adjustment will be for the increase or decrease in accounts payable during the period and will adjust net income in the operating activities section in the statement of cash flows.
• B)The adjustment will be for the increase or decrease in accounts receivable during the period and will adjust net income in the operating activities section in the statement of cash flows.
• C)The adjustment will be for the increase or decrease in inventory during the period and will adjust net income in the operating activities section in the statement of cash flows.
• D)The adjustment will be for the increase or decrease in wages payable during the period and will adjust net income in the operating activities section in the statement of cash flows.

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Definitions:

Working Conditions

Refers to the environment and terms under which work is performed, including hours, physical aspects, legal rights, and responsibilities.

Strategic Leadership

Strategic Leadership refers to the ability of leading an organization towards its long-term goals by envisioning, planning, and implementing strategies that foster sustainable growth.

Ethics Leaders

Individuals who promote and uphold ethical standards and integrity within an organization or community.

Whistle Blowers

Individuals who expose illegal, unethical, or improper conduct within their organization, often facing potential retaliation.