Wellesley,Inc The Change in Merchandise Inventory Is Shown as a Negative

question 103

True/False

Wellesley,Inc.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:
$\begin{array}{c} \text { Wellesley, Inc.}\\ \text { Comparative Balance Sheet}\\ \text { December 31,2017 and 2016}\\\begin{array}{|l|c|c|r|}\hline& 2017 & 2016 & \text { Increase/(Decrease) } \\ \hline \text { Cash } & \$ 42,000 & \$ 25,000 &\$17,000\\\hline \text { Accounts Receivable } & 32,000 & 55,000&(23,000) \\\hline \text { Merchandise Inventory } & 180,000 & 123,000&57,000 \\\hline \text { Total Assets } & \$ 254,000 & \$ 203,000 &\$51,000\\\hline\end{array}\end{array}$
The change in Merchandise Inventory is shown as a negative cash flow in the adjustments to net income.

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Definitions:

Horizontal Communication

The exchange of information, messages, or communication across the same levels of an organization or among peers.

Downward Communication

The flow of information from higher levels of an organizational hierarchy to lower levels, typically involving directives, updates, and feedback.

Pent-up Emotions

Refers to feelings that a person has suppressed or not expressed over a period of time.

Pent-up Emotions

Emotions that have been suppressed or not expressed, often leading to increased stress or emotional outbursts.