A Company Uses the Indirect Method to Prepare the Statement

question 174

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 salary payable?

• A)The decrease of $9000 will be added to net income.
• B)The decrease of $9000 will be added to cost of goods sold.
• C)The decrease of $9000 will be subtracted from cost of goods sold.
• D)The decrease of $9000 will be subtracted from net income.

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Definitions:

Evaluation of Results

The process of assessing the outcomes or impacts of an activity, project, or strategy to determine its effectiveness or success.

Measurable Targets

Specific, quantifiable goals set by an organization or individual to track progress and success.

Behavioural Decision Model

refers to a framework considering the psychological, cognitive processes individuals use in making decisions, highlighting biases and heuristics that influence judgment.

Risk and Uncertainty

The exposure to the possibility of loss or adverse outcomes in decision-making situations where the probabilities of various outcomes are not known.