Assume the Indirect Method Is Used to Compute Net Cash

question 7

Multiple Choice

Assume the indirect method is used to compute net cash flows from operating activities.For this item extracted from the financial statements-Interest Expense (assume that cash payments are equal to amount reported) -indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

• A)Add to net income to arrive at net cash flows from operating activities.
• B)Subtract from net income to arrive at net cash flows from operating activities.
• C)Not used to adjust net income to calculate net cash flows from operating activities.

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Definitions:

Prejudice

Preconceived opinion or bias against an individual or group based on their characteristics, often without proper knowledge or experience.

Discrimination

Unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, sex, or disability.

Without Prejudice

A legal term denoting that actions, statements, or documents are made or presented without any loss or waiver of rights, privileges, or legal standings.

Prejudice

Prejudice is a preconceived opinion or judgment towards people or a group without sufficient knowledge, reason, or direct experience.