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:

Linguistic Relativity

The hypothesis that one's language influences and reflects the way one thinks and perceives the world.

Social Communication Theory

A theoretical framework that explains how individuals use language and other forms of communication to interact socially and create shared meanings.

Cognitive Styles

Individual differences in the way people perceive, think, solve problems, and remember information.

Focal Objects

Objects that are the primary focus of attention in a given context, often standing out due to their salience or importance.