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:

Commercial Law

The branch of law that deals with the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.

Contract Law

The body of law that governs the creation, enforcement, and termination of contracts between parties.

Statute of Frauds

A legal doctrine that requires certain types of contracts to be in writing and signed by the party to be charged in order to be enforceable.