When Preparing the Operating Section of the Statement of Cash

question 6

Multiple Choice

When preparing the operating section of the statement of cash flows using the indirect method, which of the following items are subtracted from net income?

• A) depreciation expense
• B) gain on sale of long-term assets
• C) decrease in prepaid expenses
• D) increase in income taxes payable

---

Definitions:

Spearman's Rank-Correlation

A nonparametric measure of rank correlation that assesses the strength and direction of association between two ranked variables.

Correlation Coefficient

A measure that determines the degree to which two variables' movements are associated, ranging from -1 to 1.

Friedman Test

A non-parametric test used to detect differences in treatments across multiple test attempts.

Randomized Block Experiment

An experimental design that groups subjects into blocks based on certain intrinsic characteristics before randomly assigning treatments within each block to account for variability.