Which of the Following Adjustments to Net Income Is Correct

question 174

Multiple Choice

Which of the following adjustments to net income is correct when using the indirect method for computing cash flows from operating activities?

• A) Subtract losses from sales of securities.
• B) Add an increase in accounts receivable.
• C) Subtract gains from sales of equipment.
• D) Deduct an increase in accounts payable.

---

Definitions:

Distribution Of Scores

The spread of all values, or scores, in a data set, often visualized through graphs and commonly analyzed to understand patterns and predict future outcomes.

Mode

The value that appears most frequently in a data set.

Central Tendency

A statistical measure that identifies a single value as representative of an entire distribution of data, often used are the mean, median, and mode.

Median

A statistical measure representing the middle value in a set of data, where half the numbers are above the median and half are below.