Starting with Net Income and Adjusting It for Items That

question 117

Multiple Choice

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

• A) direct method.
• B) indirect method.
• C) working capital method.
• D) cost-benefit method.

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Definitions:

Initial Public Offering

The first time that the stock of a private company is offered to the public.

Venture Capitalist

An investor who provides capital to start-ups or small companies with high growth potential in exchange for equity stakes.

Leveraged Buyout

A financial transaction in which a company is purchased primarily with borrowed funds, often by taking on significant debt.

Venture Capitalist

An investor who provides capital to startup companies or supports small companies that wish to expand but do not have access to equities markets.