Cat Nap Corp

question 89

Multiple Choice

Cat Nap Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:

How will the change in Accounts Receivable be shown on the statement of cash flows?

• A)addition to net income under the operating activities section
• B)subtraction from net income under the operating activities section
• C)positive cash flow under the financing activities section
• D)negative cash flow under the investing activities section

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Definitions:

LessOR

The party in a lease agreement who owns the property and grants the right to use it to another party, the lessee.

Third Party

An individual or entity who is not directly involved in a contract or transaction but may be affected by its outcome.

Distress

Severe anxiety, sorrow, or pain; in a legal context, the seizure of property to compel payment or performance of a duty.

Rental Arrears

The amount of money owed by a tenant for rent that has not been paid by the due date.