Accounts Receivable Increased $13,000 During the Current Period

question 187

Multiple Choice

Accounts receivable increased $13,000 during the current period.Sales on account for the current period were $175,000.The amount to be reported on the cash flow statement using the direct method under operating activities is:

• A) $188,000
• B) $175,000
• C) $162,000
• D) $13,000

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Definitions:

Market Capitalization Rate

The expected rate of return on a portfolio consisting of all publicly traded stocks, used as a measure to value a company's stocks based on the market’s expectations of its future earnings.

Earnings Retention Ratio

A financial metric indicating the percentage of a company's net earnings that is not paid out as dividends, but instead retained for reinvestment.

Excluding Growth Opportunities

The omission or overlooking of potential future projects or investments that could lead to an increase in company value.

ROE

Return on Equity is a measure of a company's profitability relative to shareholders' equity.