Under the Indirect Approach,adjustments Must Be Made to Net Income

question 58

Multiple Choice

Under the indirect approach,adjustments must be made to net income in the operations section for all of the following items,except

• A)depreciation.
• B)gain on the sale of equipment.
• C)loss on the sale of land.
• D)proceeds for the issuance of preferred shares.

Comprehend and apply the correct journal entries for various types of accounting adjustments including accruals, deferrals, and adjustments for prepaid expenses.

Identify the role and calculation of ratios, such as total asset turnover ratio and earnings per share, in evaluating company performance.

Understand the process of recording and adjusting for unearned revenue.

Comprehend the accounting cycle including the preparation of financial statements and closing entries.

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Definitions:

Product Fill Rate

The percentage of customer or sales orders fulfilled from stock at hand.

Order Fill Rate

A measure of supply chain efficiency that indicates the percentage of customer orders that are fulfilled without backorders or stockouts.

Safety Inventory

Extra inventory held to guard against uncertainty in demand or supply.

Product Availability

The extent to which goods are in stock and ready for sale or delivery at any given time.