On a Statement of Cash Flows Prepared Using the Indirect

question 6

Multiple Choice

On a statement of cash flows prepared using the indirect method,an increase in Accounts Payable during the period is:

• A)added to net income to determine net cash provided by operating activities.
• B)deducted from net income to determine net cash provided by operating activities.
• C)shown as a cash inflow in the investing activities section.
• D)shown as a cash inflow in the financing activities section.

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Definitions:

Financial Markets

Platforms or systems where parties engage in the exchange of financial instruments such as stocks, bonds, currencies, and derivatives.

Bell Curve

A graphical representation of a normal distribution, showing how the likelihood of variables is highest near the mean and decreases symmetrically in both directions.

Frequency Distribution

A statistical analysis showing how often various values occur within a data set, often displayed in a table or graph.

Variance

A statistical measure that represents the spread or dispersion of a set of data points or investment returns from their mean.