When Using the Indirect Method to Complete the Cash Flows

question 33

Multiple Choice

When using the indirect method to complete the cash flows from operating activities section,what is the proper treatment for an increase in the Inventory account?

• A) Deduct the increase to cash payments to suppliers
• B) Add the increase to net income
• C) Add the increase to cash collections from customers
• D) Deduct the increase from net income

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Definitions:

Polarity

A property of molecules with an uneven distribution of charges, resulting in molecules having a positive end and a negative end.

NHS

The National Health Service (NHS) is the publicly funded healthcare system of the United Kingdom, providing a comprehensive range of medical services.

Polarity

A property of molecules having a distribution of charge leading to molecules having distinct positive and negative ends.

Carbon Monoxide

A colorless, odorless, and toxic gas consisting of one carbon atom and one oxygen atom, chemically represented as CO.