Assume the Indirect Method Is Used to Compute Net Cash

question 117

Multiple Choice

Assume the indirect method is used to compute net cash flows from operating activities.For this item extracted from the financial statements-Interest Income (assume that cash received is equal to amount reported) -indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

• A)Add to net income to arrive at net cash flows from operating activities.
• B)Subtract from net income to arrive at net cash flows from operating activities.
• C)Not used to adjust net income to calculate net cash flows from operating activities.

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Definitions:

Distal Attachment

The site at which a muscle tendon connects to the bone that is farther from the center of the body or point of reference.

Tibial Tuberosity

A large protrusion on the anterior part of the tibia, where the patellar ligament attaches.

Femur

The longest and strongest bone in the human body, extending from the hip to the knee.

Patellar Surface

The patellar surface is the area on the distal end of the femur where the patella (kneecap) articulates or makes contact.