Krech Corporation's Comparative Balance Sheet Appears Below

question 70

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 Receivable will be subtracted from net income; The change in Inventory will be added to net income
• B) The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income
• C) The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income
• D) The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income

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Definitions:

Adrenal Cortex

The outer portion of the adrenal gland that produces steroid hormones which regulate carbohydrate and fat metabolism and mineralocorticoid hormones that regulate salt and water balance.

Plasma Levels

The concentration of substances in the blood plasma, often used to measure the amount of drugs, hormones, and other components.

Zona Fasciculata

Middle layer of the adrenal cortex that secretes cortisol.

Cortisol

A steroid hormone produced by the adrenal glands, involved in stress response, metabolism, and inflammation control.