If the Indirect Method Is Used to Prepare a Statement

question 147

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)Amortization expense.
• B)Depreciatione expense.
• C)Loss on sale of land.
• D)All of these choices.

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Definitions:

B2C

An acronym for "Business-to-Consumer," describing transactions conducted directly between a company and consumers who are the end-users of its products or services.

Book to Capital

The ratio of a company's net book value of its assets to its capital, indicating how much of the company's assets are financed by shareholder capital.

Purchases Journal

A journal used to record all purchases of goods and services on credit for a company's operational needs.

Creditor Accounts

Accounts payable to suppliers or lenders from whom a business has borrowed money or purchased goods on credit.