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:

Closed-loop

A system where the products, materials, or resources are recycled back into the process, minimizing waste and the need for new raw materials.

Returned Goods

Items that have been sold and later returned by the customer to the seller, usually due to issues like defects, dissatisfaction, or the wrong product being delivered.

Logistics Functions

The tasks involved in the planning, implementation, and control of the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption.

Supply Chain Management

The strategic coordination of business functions within a company and across its supply network to improve the flow of goods and services from origin to consumption.