Homework Clinic
Social Science Clinic => Accounting => Topic started by: burchfield96 on Jul 5, 2018
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The control plan called key verification is designed to reduce the possibility that data will be misread or miskeyed during data entry.
Indicate whether the statement is true or false
Question 2
Team Shirts, Inc recognized 4,690 of insurance expense for the year. At the beginning of the year, the balance in Prepaid insurance was 400. At the end of the year, the balance was 775.
How is the accounting information for these items reported on the statement of cash flows using the INDIRECT method?
What will be an ideal response?
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Answer to Question 1
T
Answer to Question 2
The net increase in Prepaid insurance of 375 is subtracted from net income in the operating activities section of the statement. The 4,690 is not reported on the statement of cash flows separately because it has already been deducted in arriving at net income.