Asked by Maricarmen Fierros on Jun 30, 2024
Verified
When computing the net cash provided by operating activities under the indirect method on the statement of cash flows, a decrease in common stock would be subtracted from net income.
Common Stock
A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.
Indirect Method
A way of calculating cash flows from operating activities by adjusting net income for changes in non-cash working capital items.
- Familiarize yourself with the indirect strategy for preparing the statement of cash flows.
- Gauge the net cash receipts from operating transactions through the adoption of an indirect method.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
False
Explanation :
A decrease in common stock would not be included in the calculation of net cash provided by operating activities under the indirect method. It would be reflected in the financing section of the statement of cash flows.
Learning Objectives
- Familiarize yourself with the indirect strategy for preparing the statement of cash flows.
- Gauge the net cash receipts from operating transactions through the adoption of an indirect method.
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