If a Company Uses the Indirect Method to Prepare the Statement

question 62

Multiple Choice

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

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

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Definitions:

Primary Caregiver

A primary caregiver is the main person who provides direct care and support to a child, elderly, or an individual with disabilities, facilitating their daily needs and emotional well-being.

Surrogate Mothers

Women who carry and give birth to a child for another person or couple, often through a legal agreement.

Social Interactions

Exchanges between two or more individuals, influencing each other's feelings, behaviors, and thoughts.

Strange Object

refers to an unfamiliar or unknown item that is encountered, often used in experiments to observe reactions or responses to novel stimuli.