Under the Indirect Method, Which of the Following Would Be

question 19

Multiple Choice

Under the indirect method, which of the following would be subtracted from net income when determining net cash flows from operations?

• A) gain on the sale of a used truck
• B) amortization expense
• C) decrease in prepaid rent
• D) increase in salaries payable

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Definitions:

Correlated

Refers to the relationship between two variables where a change in one can be associated with a change in the other.

Market

A place or system where buyers and sellers interact to trade goods, services, or securities.

Expected Return

This refers to the average amount of profit or loss one can expect from an investment based on its historical performance and probabilities of outcomes.

Beta

A measure of a stock's volatility in relation to the overall market; used in the capital asset pricing model (CAPM) to estimate the return of an asset based on its risk.