If the Indirect Method Is Used to Prepare a Statement

question 99

Multiple Choice

If the indirect method is used to prepare a statement of cash flows, which of the following would be added to net income to arrive at net cash flows from operating activities?

• A) Decrease in accounts payable
• B) Increase in inventory
• C) Decrease in prepaid expenses
• D) Increase in accounts receivable

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Definitions:

Maslow's Need Hierarchy

A theory of human motivation which states that people are motivated to fulfill basic needs before moving on to other, more advanced needs.

Incentives

Rewards or motivations provided to encourage specific behaviors or outcomes, commonly used in organizational settings to enhance performance.

Physiological Need

Basic physical requirements for human survival, such as food, water, and shelter, as identified in Maslow's hierarchy of needs.

Need for Sleep

Refers to the essential, intrinsic requirement of all human beings (and many animals) for rest through sleep to maintain physical, mental, and emotional health.