Indicate Whether Each of the Following Would Be Added to or Subtracted

question 17

Essay

Indicate whether each of the following would be added to or subtracted from net income when using the indirect method to reconcile net income to cash flows from operating activities.

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Definitions:

Adjusted Trial Balance

A trial balance that accounts for all adjustments made in the accounting period, used for preparing financial statements.

General Ledger Accounts

The complete record of all financial transactions over the life of a company, organized by account.

Income Statement Accounts

Income statement accounts are those financial accounts that track the revenues, expenses, gains, and losses of a business, which together determine its net profit or loss for a period.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.