Krech Corporation's Comparative Balance Sheet Appears Below

question 115

Multiple Choice

Krech Corporation's comparative balance sheet appears below:
The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities.
-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:

Ketones

Organic compounds characterized by a carbonyl group (C=O) bonded to two carbon atoms.

Imines

Chemical compounds characterized by the presence of a carbon-nitrogen double bond, with the nitrogen atom connected to a hydrogen atom or an organic radical.