A Company Uses the Indirect Method to Prepare the Statement

question 61

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows.Which of the following items would be added to net income in determining the net cash flow from operating activities?

• A)A decrease in accounts receivable would be added to net income.
• B)An increase in inventory would be added to net income.
• C)A decrease in accounts payable would be added to net income.
• D)An increase in preferred dividends payable would be added to net income.

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Definitions:

Formal Authority

The power granted to an individual due to their position or role within an organization, enabling them to make decisions and enforce rules.

Participative Leadership

A leadership style in which the leader involves team members in decision-making processes and goal setting, fostering a sense of ownership and collaboration.

Warren Bennis

was a pioneering leadership scholar and author who contributed significantly to the study of leadership, emphasizing the importance of character, creativity, and adaptive capacity in leaders.

Philip Slater

was an American sociologist and playwright known for his work on social structure and dynamics, particularly in relation to modern American society.