Assuming the Use of the Indirect Method to Prepare the Statement

question 44

Essay

Assuming the use of the indirect method to prepare the statement of cash flows, indicate whether each of the following items would be added to net income, subtracted from net income or not included in the operating activity section. Use the letters "A" for added; "S" for subtracted or "N" for not included in operating activity section. $$\begin{array} { | l | l | c | } \hline & & \text { Answers } \\\hline & \text { Example: Increase In Accounts Receivable } & \text { S } \\\hline \text { a. } & \text { Decrease in Accounts Payable } & \\\hline \text { b. } & \text { Decrease in Bond Payable } & \\\hline \text { c. } & \text { Decrease in Inventory } & \\\hline \text { d. } & \text { Increase in Common Stock } & \\\hline \text { e. } & \text { Decrease in Accounts Receivable } & \\\hline \text { f. } & \text { Depreciation Expense } & \\\hline \text { g. } & \text { Decrease in Equipment } & \\\hline \text { h. } & \text { Increase in Prepaid Rent } & \\\hline \text { i. } & \text { Decrease in Prepaid Insurance } & \\\hline\end{array}$$

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Definitions:

Psychic Energy

In psychoanalytic theory, the energy produced by instinctual drives and processes, which powers the mind and motivates behavior.

Repressed Emotions

Emotions that have been unconsciously hidden away by an individual to avoid dealing with the stress or trauma associated with them.

Displacement

A psychological defense mechanism where emotional responses are transferred from their original source to a safer or more acceptable object or person.

Secondary Gain

The advantage or benefit a person unconsciously gains from maintaining their illness or ailment.