How Is the Amortization of Patents Reported in a Statement

question 105

Multiple Choice

How is the amortization of patents reported in a statement of cash flows that is prepared using the indirect method?

• A) A decrease in cash flows from investing activities.
• B) An increase in cash flows from investing activities.
• C) A deduction from net income in arriving at cash flows from operations.
• D) An addition to net income in arriving at cash flows from operations.

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Definitions:

Imines

Organic compounds characterized by the group C=N, formed by the condensation of an aldehyde or ketone with an amine.

Acid-Catalyzed

A chemical reaction that is accelerated in the presence of an acid, which acts as a catalyst to increase the rate of the reaction.

Organic Product

A compound or material derived from living organisms or produced through organic reactions.

Acid Catalyst

A substance that increases the rate of a chemical reaction through donation of protons (H+ ions) without undergoing any permanent chemical change itself.