The Most Recent Comparative Balance Sheet of Giacomelli Corporation Appears

question 95

Multiple Choice

The most recent comparative balance sheet of Giacomelli Corporation appears below: The company uses the indirect method to construct the operating activities section of its statements of cash flows. Which of the following is correct regarding the operating activities section of the statement of cash flows?

• A)The change in Accounts Payable will be added to net income;The change in Accrued Liabilities will be subtracted from net income
• B)The change in Accounts Payable will be subtracted from net income;The change in Accrued Liabilities will be added to net income
• C)The change in Accounts Payable will be subtracted from net income;The change in Accrued Liabilities will be subtracted from net income
• D)The change in Accounts Payable will be added to net income;The change in Accrued Liabilities will be added to net income

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Point B

A specific position or location on a graph or diagram, used often in economic models to denote a particular outcome or situation.

Point A

A specific position or location often referenced in economic models or graphs to illustrate a particular scenario or outcome.

Opportunity Cost

The budgetary repercussion of passing on the subsequent top pick when decisions are taken.