Assume the Indirect Method Is Used to Compute Net Cash

question 17

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 Income Taxes Payable-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:

Inheritance

Assets or rights received from a deceased person's estate by their heirs or designated beneficiaries.

License

A legal permission allowing the licensee to do something that would otherwise be prohibited, often concerning intellectual property or specific activities.

Temporary Right

A limited-time entitlement or permission granted to an individual or entity for a specific purpose or activity.

Specific Purpose

An intention or objective designated for a particular activity, fund, or project, often stated to define its scope.