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:

Cultures

The beliefs, practices, arts, institutions, and all other products of human work and thought considered as a unit, especially as it pertains to a particular group of people at a certain time.

Percentage

A portion of 100 used in mathematics to express quantities as a fraction of 100.

Work Time

The period during which an individual is obligated to perform tasks or duties for an employer.

Listening

The active process of receiving, understanding, and interpreting auditory messages from others.