A Company Uses the Direct Method to Prepare the Statement

question 110

Multiple Choice

A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements: *Relates solely to the acquisition of inventory
Which of the following is correct about accounts receivable in the operating activities category of the cash flow statement?

• A)The increase of $17,000 will be subtracted from net income.
• B)The increase of $17,000 will be subtracted from sales to determine cash received from customers.
• C)The increase of $17,000 will be added to sales to determine cash received from customers.
• D)The increase of $17,000 will be added to net income.

---

Definitions:

Plantation Forestry

The practice of growing trees in a managed plot for commercial timber or pulp, often involving monocultures of a single species.

Ecosystem Restoration

The process of aiding the recovery of an ecosystem that has been degraded, damaged, or destroyed, aiming to restore its original structure and functioning.

Tolerance

The ability or capacity to endure continued subjection to something, such as a drug or environmental conditions, without adverse reaction.

Maple Seedling

A young tree that has germinated from a maple seed and is in its early stages of growth.