During the Year the Balance in the Inventory Account Increased

question 16

Multiple Choice

During the year the balance in the Inventory account increased by $4,000.In order to adjust the company's net income to a cash basis using the direct method on the statement of cash flows,it would be necessary to:

• A)subtract the $4,000 from the sales revenue reported on the income statement.
• B)add the $4,000 to the sales revenue reported on the income statement.
• C)subtract the $4,000 from the cost of goods sold reported on the income statement.
• D)add the $4,000 to the cost of goods sold reported on the income statement.

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Definitions:

Fifth Amendment

An amendment to the U.S. Constitution that provides protections including the right against self-incrimination and double jeopardy.

Self-Incrimination

The act of giving testimony that implicates oneself in criminal wrongdoing. The Fifth Amendment to the Constitution states that no person “shall be compelled in any criminal case to be a witness against himself.”

Double Jeopardy

To place at risk, jeopardize, a person’s life or liberty twice. The Fifth Amendment to the Constitution prohibits a second prosecution for the same criminal offense.

Fourth Amendment

An amendment to the United States Constitution that protects individuals against unreasonable searches and seizures by the government.