For Each of the Following Items, Indicate by Using the Appropriate

question 3

Multiple Choice

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.
-Increase in merchandise inventory during a period.

• A)Added to net income
• B)Deducted from net income
• C)Cash outflow--investing activity
• D)Cash inflow--investing activity
• E)Cash outflow--financing activity
• F)Cash inflow--financing activity
• G)significant noncash investing and financing activity

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Definitions:

Gearset

A set of gears arranged to transmit mechanical power from one part of a machine to another.

Torque Converter Stator

A component within a torque converter that redirects fluid returning from the turbine to assist in providing torque multiplication.

Stall Speed

The lowest speed at which an aircraft can fly to maintain level flight, or in automotive, the RPM at which the torque converter transfers power from the engine to the transmission under full load.

Shift Points

Specific engine speeds at which an automatic transmission changes gears, maximizing performance or fuel efficiency.