A Company Uses the Indirect Method to Prepare the Statement

question 66

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows.How will the adjustment to reflect the amount of cash payments to suppliers be presented on the statement?

• A)The adjustment will be for the increase or decrease in accounts payable for the period and will adjust net income in the operating activities section.
• B)The adjustment will be for the increase or decrease in inventory for the period and will adjust net income in the operating activities section.
• C)The adjustment will be for the increase or decrease in accrued expenses for the period and will adjust net income in the operating activities section.
• D)The adjustment will be for the increase or decrease in accounts receivable for the period and will adjust net income in the operating activities section.

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Definitions:

Habit

A repetitive behavior that an individual performs regularly, often unconsciously.

Frequency

The rate at which something occurs or is repeated over a particular period of time or in a given sample.

Stop Signal Task

A psychological test used to measure an individual's ability to inhibit a response that has already been initiated.

Attention-Deficit Disorder (ADD)

A neurological disorder characterized by a pattern of inattention and/or impulsivity that interferes with functioning or development.