The Comparative Balance Sheets of Farmore Corp

question 102

Multiple Choice

The comparative balance sheets of Farmore Corp.for 2014 and 2013 indicate that short-term trade notes receivable increased from $5,000 in 2013 to $75,000 in 2014.How will this change be reported on Farmore's statement of cash flows (Farmore uses the indirect method) ?

• A)It will be included in the amount of cash and cash equivalents at the end of 2014.
• B)It will be reported as a deduction from net income in the operating activities section.
• C)It will be reported as a cash outflow in the investing activities section.
• D)It will be added to net income in the operating activities section.

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Definitions:

Accounting Elements

Fundamental categories in financial accounting that include assets, liabilities, equity, revenue, and expenses.

Financial Reports

Documents that provide an overview of the financial condition of an organization, including income statements, balance sheets, and cash flow statements.

Statements of Financial Accounting Concepts

A series of documents issued by the Financial Accounting Standards Board outlining the objectives and fundamental concepts underlying financial reporting and accounting practices.

General Objective

A broad primary goal or aim that an organization or individual plans to achieve in the long term.