Which of the Following Would Be Subtracted from Net Income

question 44

Multiple Choice

Which of the following would be subtracted from net income when determining cash flows from operating activities under the indirect method?

• A)A decrease in utilities payable.
• B)Patent amortization expense.
• C)A decrease in prepaid rent.
• D)A loss on the sale of a depreciable asset.

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Definitions:

Staff Turnover

The turnover rate of employees in a company, signifying the speed at which staff members depart and are subsequently replaced by new hires.

Credit Sales

Sales made by a business where the customer is allowed to pay at a later date, as opposed to immediate cash transactions.

Cash Received

The total amount of cash received by a business during a specific period, from various sources like sales, investments, or financing.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly used to create the product.