A Company Uses the Indirect Method to Prepare the Statement

question 32

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial statements: *Relates solely to the acquisition of inventory
What will appear in the operating activities section related to accounts payable?

• A)The increase of $14,000 will be subtracted from net income.
• B)The increase of $14,000 will be added to net income.
• C)The increase of $14,000 will be subtracted from cost of goods sold.
• D)The increase of $14,000 will be added to cost of goods sold.

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Definitions:

Time Horizon

The fixed point in the future at which certain outcomes will be evaluated or a plan is expected to come to fruition.

Select Forecasting Model

Determining the most appropriate statistical or analytical model to predict future trends based on past and present data.

Delphi Method

A forecasting technique using a group process that allows experts to make forecasts.

Decision Makers

Individuals or groups responsible for making choices that determine an organization's or individual's course of action.