Under the Indirect Method of Preparing a Statement of Cash

question 5

Multiple Choice

Under the indirect method of preparing a statement of cash flows,a decrease in the balance in the Accounts Receivable account during the year is:

• A) added in the operating activities section
• B) added in the investing activities section
• C) subtracted in the operating activities section
• D) subtracted in the financing activities section

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Definitions:

Value Of Land

The worth of a piece of land determined by its characteristics, location, and potential uses.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to a stable market condition.

Elastic

A characteristic of demand or supply indicating a high responsiveness to changes in price.

Pure Rent

Income received by a landowner for the use of a natural resource, land, or location that is essentially in fixed supply.