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:

Theorists

Individuals who formulate theories or concepts in a particular field of study or aspect of human behavior.

Organic Structures

Organic structures refer to flexible, adaptive organizational structures that are characterized by low levels of formalization, decentralized decision-making, and a broad scope of control.

Mechanistic

Pertains to organizational structures that are highly formalized and centralized, with strict hierarchies and clear, rigid procedures.

Authority

The power or right to give orders, make decisions, and enforce obedience, often established by a position in a hierarchical organization.