Answer:
D) 4
Explanation:
There’re 3 section in an cash flow statement: Operating, Financing, and Investing
These items to be allocated in the section of cash flow as followings:
a) Decrease in accounts receivable: Operating (added)
(b) Issuance of common stock : Financing
(c) Increase in interest receivable: Operating (subtracted)
(d) Purchase of land : Investing
(e) Decrease in accounts payable: Operating (subtracted)
(f) Gain on the sale of equipment Investing
(g) Depreciation expense: Operating (added)
(h) Payment of dividends: Financing
(i) Decrease in utilities payable: Operating (subtracted)
j) Increase in inventory: Operating (subtracted)
There’re 06 items in Operating as above, in which only 04 are to be subtracted from net income from operating cash flow