Using the Indirect Method, Which of the Following Would Not

question 76

Multiple Choice

Using the indirect method, which of the following would not be an adjustment to profit?

• A)depreciation expense
• B)an increase in prepaid insurance
• C)an increase in inventories
• D)an increase in Land

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Definitions:

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

GDP

Gross Domestic Product, the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

OEM

Original Equipment Manufacturer, referring to companies that produce parts or equipment that may be marketed by another manufacturer.

GNI

Gross National Income, which is the total domestic and foreign output claimed by residents of a country, including salaries, product earnings, and property income.