Using the Indirect Method to Calculate Net Cash Provided by Operating

question 113

Multiple Choice

Using the indirect method to calculate net cash provided by operating activities, a decrease in prepaid expenses is:

• A) subtracted from net income.
• B) added to net income.
• C) ignored since it does not affect expenses.
• D) ignored since it does not affect income.

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Definitions:

Face Validity

The extent to which a test appears to measure what it's supposed to measure, based on subjective judgment.

Content Validity

When the content of a test includes a representative sample of behaviours thought to be related to the construct (that is, the concept or entity) the test is designed to measure.

Representative Sample

A portion of the population that represents the entire group accurately.

Single-subject Design

A research design that focuses on the responses of a single participant to document the effectiveness of an intervention.