Using the Indirect Method to Prepare the Statement of Cash

question 5

True/False

Using the indirect method to prepare the statement of cash flows,an increase in accounts receivable is subtracted from net income in calculating Net Cash Provided by Operating Activities.

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Definitions:

Operating Income

The amount of profit realized from a business's operations after deducting operating expenses such as wages, depreciation, and cost of goods sold.

Invested Assets

Resources such as securities and properties that an individual or organization allocates money into with the expectation of generating income or profit.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Return on Investment

A financial ratio that calculates the percentage gain or loss on an investment relative to the cost of the investment, indicating the efficiency of the investment.