The spreadsheet approach to preparing a statement of cash flows includes all of the following except:
A)a debit to intangible assets and a credit to cash flow from investing activities for the purchase of licensing rights.
B)a decrease in cash flow from operating activities if prepayments exceed amounts expensed.
C)an increase in cash flow from operating activities if more inventory is purchased than sold.
D)a credit to contributed capital and a debit to cash flow from investing activities for proceeds of a stock issuance.

Question

Quizplus · Accepted Answer

An increase in inventory does not necessarily result in an increase in cash flow from operating activities, as it may indicate that more cash was spent on inventory purchases rather than inventory sales. The other options are all examples of transactions that would be included in a statement of cash flows prepared using the spreadsheet approach.

The Spreadsheet Approach to Preparing a Statement of Cash Flows