Krech Corporation's Comparative Balance Sheet Appears Below

question 61

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 Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be subtracted from net income
• B) The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be subtracted from net income
• C) The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be added to net income
• D) The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be added to net income

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Definitions:

Frequency of Payouts

Refers to how often employees receive their earnings, such as weekly, bi-weekly, monthly, or quarterly.

Bonus Allocation

is the distribution of financial rewards to employees beyond their regular pay, typically based on performance or company profit.

Gain Sharing

A performance-related pay strategy that offers employees financial rewards based on improvements in productivity, efficiency, or profitability within their work group or organization.

Higher Performers

Employees who consistently exceed job expectations and perform at levels beyond their peers.