In Converting Net Income to Net Cash Provided by Operating

question 55

Multiple Choice

In converting net income to net cash provided by operating activities under the indirect method:

• A) decreases in accounts receivable and increases in prepaid expenses are added.
• B) decreases in inventory and increases in accrued liabilities are added.
• C) decreases in accounts payable and decreases in inventory are deducted.
• D) increases in accounts receivable and increases in accrued liabilities are deducted.

---

Definitions:

Moral Hazard

A situation where one party engages in risky behavior knowing that it is protected against the risk because another party will incur the cost.

U.S. Population

The total number of residents living in the United States, as measured by census and population estimates.

Defensive Medicine

The practice by healthcare providers of ordering tests, treatments, or procedures primarily to protect themselves from litigation, rather than to benefit the patient's health.

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of illness, injury, and other physical and mental impairments in people.