In calculating net cash from operating activities using the indirect method, an increase in prepaid expenses during a period is
A) deducted from net income.
B) added to net income.
C) ignored because it does not affect income.
D) ignored because it does not affect expenses.
A
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The assumption that a company makes about its inventory cost flow can affect cost of goods sold on its ________ and inventory on its ________ .
A. income statement; balance sheet B. income statement; income statement C. balance sheet; income statement D. balance sheet; balance sheet
An organization's four basic stakeholder groups include investors, employees, internal business processes, and customers
Indicate whether the statement is true or false
U.S. GAAP and IFRS distinguish between revenues and expenses on the one hand and gains and losses on the other. Which of the following is/are true?
a. Revenues and expenses result from the recurring, primary operating activities of a business. b. Income items include the ordinary, recurring operating activities of the firm. c. Gains and losses result from either peripheral activities or nonrecurring activities. d. The reporting of revenues and expenses are at gross amounts, and firms report gains and losses at net amounts. e. all of the above
Bonds Payable on the balance sheet of Michael LLC includes one series of bonds initially issued at a premium. The entry made in the accounting records for interest expense during the period was as follows: Interest Expense . . . . . . . . . . . . . . . . .4,500 Premium on Bonds Payable . . . . . . . . . . 500 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 The firm spent
$5,000 of cash even though it subtracted only $4,500 of interest expense in computing net income. In preparing the statement of cash flows using the T-account work sheet a. subtract an additional $5,000 from net income to derive cash flow from operations. b. subtract an additional $4,500 from net income to derive cash flow from operations. c. subtract an additional $500 from net income to derive cash flow from operations. d. add an additional $500 from net income to derive cash flow from operations. e. add an additional $4,500 from net income to derive cash flow from operations.