Using the Indirect Method, Which of the Following Would Not

question 3

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:

Factors of Production

Resources used in the production of goods and services, typically categorized into land, labor, capital, and entrepreneurship.

Households

Economic units consisting of all the people who occupy a housing unit, making decisions about resource allocation, consumption, and labor supply.

Goods and Services

Physical items (goods) and intangible benefits (services) that fulfill human wants or needs.

Factors of Production

Resources used in the production of goods and services, traditionally categorized as land, labor, capital, and entrepreneurship.