Starting with Net Income and Adjusting It for Items That

question 78

Multiple Choice

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

• A) direct method.
• B) indirect method.
• C) cost-benefit method.
• D) working capital method.

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Definitions:

Appliances

Electrical or mechanical machines that perform domestic functions, such as refrigerators or washing machines.

Net Proceeds

The final amount of money received from a transaction after deducting all associated costs and expenses.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, typically a percentage of the sales or services sold.

Consignment

The process of providing goods to a third-party retailer who pays the supplier only for the merchandise sold, not for unsold inventory.