A Company Uses the Indirect Method to Prepare the Statement

question 173

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 inventory?

• A)The decrease of $20,000 will be subtracted from net income.
• B)The decrease of $20,000 will be subtracted from cost of goods sold.
• C)The decrease of $20,000 will be added to net income.
• D)The decrease of $20,000 will be added to cost of goods sold.

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Definitions:

Clayton Alderfer

An American psychologist known for developing ERG Theory, which categorizes human needs into existence, relatedness, and growth categories.

Interpersonal Safety

The condition in which an individual feels secure and free from threat or harm in their interactions with others, fostering open communication and trust.

Relatedness Need Category

Pertains to the psychological need to establish and maintain significant relationships with others, feeling connected and belonging within social groups.

Clayton Alderfer

An American psychologist known for developing the ERG theory, which categorizes human needs into existence, relatedness, and growth categories.