The Comparative Balance Sheets for Spring Co

question 109

Multiple Choice

The comparative balance sheets for Spring Co.for 2014 and 2013 indicate that accounts receivable decreased during 2014.Spring uses the indirect method of preparing the operating activities section of its statement of cash flows.How will the decrease in accounts receivable be reported on the statement of cash flows?

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

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Definitions:

Customer Service

Assistance and advice provided by a company to those people who buy or use its products or services.

Danger Zone

In food safety, the danger zone refers to temperatures between 40°F and 140°F where bacteria grow most rapidly, potentially leading to foodborne illnesses.

Competitor

An entity that operates in the same industry or market as another, offering similar goods or services.

OTC Model

A model where securities are bought and sold via a dealer network as opposed to on a centralized exchange.