Assume That the Balance of Accounts Payable Does Not Change

question 13

Multiple Choice

Assume that the balance of accounts payable does not change during a period.When preparing a statement of cash flows,an increase in ending inventory over beginning inventory will result in an adjustment to net income under the indirect approach because

• A)the amount of cost of goods sold is equal to the amount of cash paid for purchases.
• B)consumed inventory is an expense but not a use of funds.
• C)the amount of cost of goods sold on an accrual basis is less than the amount of cash paid for purchases of inventory.
• D)the amount of cash paid for purchases of inventory is less than the amount of cost of goods sold on an accrual basis.

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Definitions:

Fracture

A break or crack in a rock; subdivided into joints and faults.

Rock Layers

Strata or sequences of rock sediment that have accumulated over time, each layer representing a specific era in geologic history.

Youngest Unit

The most recently formed or deposited geological layer or structure in a sequence.

Logrolling

A political term denoting the practice of exchanging favors, especially in legislative contexts, but can also refer to reciprocal arrangements in other areas.