When Using the Indirect Method to Prepare the Statement of Cash

question 23

Multiple Choice

When using the indirect method to prepare the statement of cash flows, an increase in noncash current assets is

• A)subtracted from current liabilities in the cash flows from financing activities section.
• B)subtracted from net income in the cash flows from operating activities section.
• C)added to net income in the cash flows from operating activities section.
• D)added to equipment purchases in the cash flows from investing activities section.

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Definitions:

Emotional Part

A component of human psychology that involves feelings, moods, and affective states.

Rational Part

The aspect of the human mind or personality that is responsible for logic, reasoning, and analytical thought.

Id

In psychoanalytic theory, the part of the psyche that is the source of instinctual drives and desires, operating on the pleasure principle.

Psychoanalytic Theory

A theory of personality and a method of psychotherapy, originally formulated by Sigmund Freud, that emphasizes unconscious motivations and conflicts.