Valentine Corp

question 101

Multiple Choice

Valentine 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 Merchandise Inventory 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:

Incentive to Change

A factor or set of factors that motivates individuals or entities to alter their behavior or decision-making.

Equitable

Fair or impartial in treatment or judgment without bias or favoritism.

Efficient

When resources are used in a way that maximizes the production of goods and services without wasting any resources.

Birthday Cake

A special cake prepared and decorated to celebrate someone's birthday.