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.

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Definitions:

Exports

Goods or services produced in one country and sold to customers in other countries, contributing to a nation's economy.

Imports

Goods or services brought into one country from another for the purpose of trade or sale.

Business Cycle

The cyclical fluctuations in economic activity and growth that an economy experiences over time, typically consisting of expansion, peak, contraction, and trough phases.

Pharmaceuticals

Substances or products used in the diagnosis, treatment, or prevention of diseases and medical conditions.