An Increase in Accrued Liabilities of $1,000 During a Year

question 49

Multiple Choice

An increase in accrued liabilities of $1,000 during a year would be shown on the company's statement of cash flows prepared under the indirect method as:

• A) an addition to net income of $1,000 in order to arrive at net cash provided by operating activities.
• B) a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
• C) a deduction of $1,000 under investing activities.
• D) an addition of $1,000 under financing activities.

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Definitions:

Operational Assumptions

Preconceived notions or expectations about how daily business operations should proceed or will occur.

Scenario Planning

A strategic planning method that organizations use to visualize and prepare for various future conditions or events.

Qualitative Forecasting

Prediction methods that rely on expert judgments and non-numerical information, often used for making long-term assessments.

Organizational States

Different phases or conditions in which an organization operates, reflecting its growth, stability, or decline.