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:

Psychological Counseling

A form of therapy aimed at addressing mental health issues and improving an individual's emotional well-being through dialogue and various psychological techniques.

Express Ratification

The formal affirmation or approval of an act or contract, making it valid and binding.

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The legal age at which an individual is considered an adult and can engage in activities such as voting and signing contracts.

Entered Into

Refers to the act of formally agreeing to or engaging in an agreement, contract, or arrangement.