Which of the Following Statements Is True When Using the Indirect

question 220

Multiple Choice

Which of the following statements is true when using the indirect method of preparing the operating activities section of the statement of cash flows?

• A) Inventory decreases are subtracted from net income.
• B) Inventory increases are subtracted from net income.
• C) Inventory increases are added to net income.
• D) None of the above.

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Definitions:

Chain Of Events

A sequence of occurrences or actions that are linked together, often leading to a particular result or outcome.

Business Model

A plan or framework for how a company creates, delivers, and captures value, in economic, social, cultural, or other contexts.

Formal Business Plan

A detailed document that outlines the strategy, objectives, and financial forecasts for a business.

Financial Projection

Financial projection is an estimate of future revenues, expenses, and profitability of a business or project.