Which of the Following Would NOT Be Done When Calculating

question 4

Multiple Choice

Which of the following would NOT be done when calculating the change in cash from operating activities under the indirect method?

• A)Add an increase in accrued interest payable
• B)Deduct the purchase of equipment
• C)Add a decrease in merchandise inventory
• D)Deduct a decrease in accounts payable

---

Definitions:

Underlying Asset

A financial asset upon which a derivative's price is based, such as stocks, bonds, commodities, or currencies.

Leverage

The use of borrowed funds to enhance the potential return of an investment.

Transaction Costs

Expenses incurred when buying or selling securities, including broker fees, commissions, and other charges that affect the profitability of investments.

Forward Contracts

Non-standardized contracts between two parties to buy or sell an asset at a specified future time at a price agreed upon today.