The Following Items Were Obtained from the Financial Records How Would the Change in Accounts Receivable Be Reported in

question 111

Multiple Choice

The following items were obtained from the financial records: $\begin{array}{ll}\text { Accounts receivable, December 31, 2014 } &\$ 100,000\\\text { Accounts receivable, December 31, 2013 } &144,000 \\\text { Sales for 2014 } & 945,000\end{array}$ How would the change in accounts receivable be reported in the operating activities section of the statement of cash flows under the indirect method?

• A)As an addition to sales.
• B)As a deduction from sales.
• C)As an addition to net income.
• D)As a deduction from net income.

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Definitions:

Hydraulic Fracturing

A technique used in the oil and gas industry to increase extraction rates by injecting fluid into subterranean rocks to create fractures.

Fracking

A process of injecting liquid at high pressure into subterranean rocks, boreholes, etc., to force open existing fissures and extract oil or gas.

Natural Gas

A fossil fuel used primarily for heating, cooking, and electricity generation, consisting mainly of methane and other hydrocarbons.

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded in a market, leading to market stability.