Avatar Company Uses the Indirect Method to Prepare the Statement

question 1

Multiple Choice

Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following income statement: Other information provided:
How much is the Net cash flow provided by operations?

• A)$20,000 positive
• B)$75,000 positive
• C)$32,000 positive
• D)$82,000 positive

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Definitions:

Transactional Approach

An accounting method focusing on individual business transactions and analyzing their effects on financial statements without considering broader economic events.

Comprehensive Income

An accounting term referring to all changes in equity during a period, except those resulting from investments by and distributions to owners.

Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership value in a firm.

Nonowner Transactions

Financial transactions that affect the balance sheet but do not involve changes in ownership equity.