Which of the Following Would Be Added to Net Income

question 34

Multiple Choice

Which of the following would be added to net income in computing cash flows from operating activities?

• A)an increase in accounts receivable
• B)an increase in inventories
• C)a decrease in deferred taxes payable
• D)a decrease in prepaid expenses

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Definitions:

At-risk Amount

The amount of money an investor can actually lose from an investment, often used to limit losses in activities where money is at risk.

Passive Activities

Economic activities in which an individual participates without materially managing or operating them, often associated with rental properties or businesses in which the individual does not actively engage.

Income

Money received, especially on a regular basis, for work or through investments.

Medical Expenses

Amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for treatments affecting any part or function of the body.