The Comparative Balance Sheets of Apollo Rocket, Inc

question 172

Multiple Choice

The comparative balance sheets of Apollo Rocket, Inc. show a net increase in inventory of $79,000 and a net decrease in accounts payable of $42,000 during 2009. In computing net cash flow from operating activities under the indirect method, net income for 2009 should be:

• A) Increased by $37,000.
• B) Reduced by $37,000.
• C) Increased by $121,000.
• D) Reduced by $121,000.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price level.

Price of Oil

The cost per barrel of crude oil as determined by global markets and supply-demand dynamics.

Quantity of Oil

The total volume or amount of oil available or in production at a given time.

Complements

Products or services that complement each other, such that a rise in the demand for one results in a rise in the demand for its counterpart.