When Using the Indirect Method of Preparing a Statement of Cash

question 12

Multiple Choice

When using the indirect method of preparing a statement of cash flows, which of the following items would need to be deducted from net income in order to reconcile to cash provided by operating activities?

• A) Increase in accounts payable
• B) Increase in accounts receivable
• C) Depreciation expense
• D) Increase in property, plant, and equipment

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Definitions:

Marketing Decisions

Refers to choices made by a company regarding the promotion, pricing, distribution, and development of products or services.

Financial Statements

Compiled official records that detail the financial activities and condition of a business, organization, or individual, including income statement, balance sheet, and cash flow statement.

Marketing Outcome Data

The results and metrics that are collected to assess the effectiveness and success of marketing activities.

Repeat Sales Reports

Documents that track and analyze the frequency and volume of products or services purchased by the same customer over time.