In Preparing a Statement of Cash Flows Under the Indirect

question 103

Multiple Choice

In preparing a statement of cash flows under the indirect method,a decrease in accounts receivable would be reported or included as a(n) :

• A) Addition to net income in the operating activities section.
• B) Deduction from net income in the operating activities section.
• C) Financing activity.
• D) Investing activity.

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Definitions:

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, depending on the price level.

Aggregate Demand

The overall consumption requirement for goods and services in an economic landscape, priced at a given level over a set duration.

Economic Fluctuations

Variations in the level of economic activity over time, characterized by periods of boom and recession.

Recession Overseas

An economic downturn that occurs in a country or region outside of one's own, potentially affecting global trade and economic stability.