If the Indirect Method Is Used to Prepare a Statement

question 96

Multiple Choice

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

• A) Increase in accrued liabilities
• B) Increase in income taxes payable
• C) Increase in accounts receivable
• D) Decrease in prepaid expenses

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Definitions:

Loyal Customers

Individuals who consistently prefer and choose a particular brand or product over competitors, often due to satisfaction, rewards, or emotional connections.

Marketing Expenditures

The total costs associated with activities aimed at creating demand for products or services, including advertising, promotions, and distribution.

Mobile Phone

A mobile phone that enables users to make and receive calls using a radio frequency connection as they move around within a service provider's coverage area.

Facilitate Purchases

The process of making it easier for customers to buy products or services, often through simplifying transactions or providing additional purchase information.