If a Company Uses the Indirect Method to Prepare the Statement

question 138

Multiple Choice

If a company uses the indirect method to prepare the statement of cash flows, which of the following items would be added to net income to determine the net cash flow from operating activities?

• A)An increase in inventory added to net income to determine the net cash flow from operating activities in the statement of cash flows.
• B)A decrease in accounts receivable would be added to net income to determine the net cash flow from operating activities in the statement of cash flows.
• C)A decrease in accounts payable would be added to net income to determine the net cash flow from operating activities in the statement of cash flows.
• D)An increase in preferred dividends payable would be added to net income to determine the net cash flow from operating activities in the statement of cash flows.

Understand the concept of marginal social benefit and marginal social cost related to pollution.

Comprehend the impact of government policies, such as taxation and permit trading, on firms' pollution emissions.

Analyze the effects of externalities and government intervention on social welfare.

Differentiate between the costs and benefits of reducing pollution for different firms.

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Definitions:

Consumer Decisions

This term refers to the choices made by individuals or groups regarding the consumption of goods and services.

Owned By Government

Refers to assets, enterprises, or entities that are fully or majorly owned and operated by a government.

Henry Ford

Henry Ford was an American industrialist and the founder of the Ford Motor Company, known for revolutionizing the automobile industry through the introduction of mass production techniques.

Pays Wages

The process by which employers compensate their employees for work performed, typically in the form of monetary payment.