Assume the Indirect Method Is Used to Compute Net Cash

question 14

Multiple Choice

Assume the indirect method is used to compute net cash flows from operating activities.For this item extracted from the financial statements-Decrease in Accounts Receivable-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

• A)Add to net income to arrive at net cash flows from operating activities.
• B)Subtract from net income to arrive at net cash flows from operating activities.
• C)Not used to adjust net income to calculate net cash flows from operating activities.

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Definitions:

Concentration Differences

Variations in the amount of a particular substance across different spaces or mediums, often leading to diffusion.

Higher Concentration

Refers to a situation where there is a greater amount of solute per unit volume of solvent in one part of a solution or mixture compared to another.

Inside Cell

Pertaining to the internal environment or components within a cell, including organelles, cytoplasm, and genetic material.

Plasma Membrane

This is a protective double lipid layer encasing the cytoplasm of a cell, overseeing the transportation of substances across the cell boundary.