Presented Below Is the Operating Activities Section of a Statement

question 65

Multiple Choice

Presented below is the operating activities section of a statement of cash flows for 2014: $\begin{array}{llr}\underline {\text { Operitima activities. }} \\\text {Net income }& & \$ 120,000 \\\text {Add: }&\text {Depreciation } &10,000 \\& \text { Decrease in accountsreceivable }& \underline {5,000} \\& &\$ 135,000 \\\text { Deduct: }& \text { Decrease in accounts payable }&\underline {15,000} \\& \text { Net cash inflow from operating activities }&\underline {\$ 120,000}\end{array}$ Which method of preparing the operating activities section was used?

• A)The direct method.
• B)The indirect method.
• C)Either method.
• D)Cannot be determined without further information.

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Definitions:

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