A Company Had Net Income of $252,000

question 138

Multiple Choice

A company had net income of $252,000. Depreciation expense was $26,000. During the year, accounts receivable and inventory increased by $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased by $2,000 and $4,000, respectively. There was also a loss on the sale of equipment of $3,000. How much was the net cash flow from operating activities on the statement of cash flows using the indirect method?

• A) $217,000
• B) $224,000
• C) $284,000
• D) $305,000

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Definitions:

Self-Serving Bias

A cognitive bias that leads individuals to attribute their successes to internal factors while blaming external factors for their failures.

Differential Forgetting

Refers to the phenomenon that different types of information are forgotten at different rates, often influenced by the relevance, emotional impact, and repetition of the information.

Fundamental Attribution Error

The tendency to overemphasize personality traits and underestimate situational factors when explaining others' behavior.

Illusory Correlation

Cognitive exaggeration of the degree of co-occurrence of two stimuli or events, or the perception of a co-occurrence where none exists.