If a Company Uses the Indirect Method to Prepare the Statement

question 40

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 paid for interest be presented on the statement of cash flows?

• A)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.
• B)The adjustment will be for to reflect 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.
• C)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.
• D)The adjustment will be for the increase or decrease in interest 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:

Transitional Recovery

The phase in the recovery process where individuals move from structured treatment settings to less intensive, more independent living situations.

Contemplation

The act of thinking deeply about something or considering it carefully over a period of time.

Motivational Methods

Strategies and techniques used to enhance an individual's motivation towards achieving a certain goal, often employed in therapy and personal development.

Challenging

Describes tasks or situations that are demanding and difficult, requiring effort, skill, or perseverance to overcome.